


wit 

Silt 




THE 




LI FE ASSU RANGE 



IS NOW USED BY THE FOLLOWING COMPANIES : 



MUTUAL, N.I 

SECURITY, " 

NEW YORK, 4i 

WASHINGTON, " 

MANHATTAN, " 

UNIVERSAL, " 

UNITED STATES,.... " 

KNICKERBOCI(p 

EXCELSIOR, 

STANDARD, 

NORTH AMERI J 

WIDOWS & ORI 

CONTINENTAL $> 

GLOBE, 

NATIONAL, . . . 
METROPOLIS J 
GREAT WESTlf 
AM. TONTINE ] % 
ASHURY, 

EQUITABLE, "' 

N. Y. STATE,... Syracuse 



BROOKLYN, ..Brooklyn 

ATLANTIC, Albany 

JETNA,.. Hartford 

PHCEMX, " 

CHARTER OAK.. < 4 
CONN. GENERAL, " 
HARTFORD L. & A. " 



WIDOW* OR., Nashville 
NASHVILLE, " 

UN. CENTRAL, Cincinnati 

MUTUAL Chicago 

CHICAGO " 

INTERNATIONAL " 
ATLAS LIFE, . . .St. Louis 
ilUT. " 



\ LI BRARY OF CONGRES S, J 

^«/. H-G8 05I " I 



UNITED STATES OF AMERICA.; 



SOUTH'N LIFE, " 
N.WEST. MUT. Wisconsin 



I " Richmond 
L.& T.Mobile 
fT., Louisville 
JMUT.WiLm'n 
icramento, Cal 

Iowa 

ABLE,....N.O 
E,. Hamilton 



The Hon. William Barnes, Insurance Commissioner for the State 
of New York, says : " I cannot doubt that Agents will find the Manual 
convenient and useful." 

A General Agent, controlling a very large business, says : " I shall 
put the Manual into the hands of every one of my sub-agents .and can- 
vassers, with the promise that he will read it." He adds: "It saves an 
immense amount of talking and explaining in instructing agents." 

Another General Agent writes : " This Manual is destined to work 
a radical change in the Insurance Agency business." 

A President writes : " The book is all that it is recommended to be. 
Our solicitors say it is icorth one hundred dollars per month 
to them." 

The following is from the Banking and Insurance Chronicle, 
Chicago : 

" On every page of this work is information of which no Life 
Insurance agent or solicitor should be ignorant if he expects to succeed 
in his calling. Indeed, we have neve]- seen set forth with such clear- 



ness the reasons why some men do not succeed in the getting of Life 
Insurance policies. Dr. Fish takes that high standard for the moral 
dignities of the profession of Life Assurance to which it is fully 
entitled, and in all of the sixty-four rules for 'Beginning,' 'Managing,' 
and ' Enlarging' the business, as well as 'Arguments in urging Assur- 
ance,' and ' How to meet Objections,' he gives methods for the guid- 
ance of the agent and the solicitor, which are ennobling alike to the 
profession and the practitioner." 

An effective General Agent writes : " I have perused every section 
of the Agent's Manual with much interest. It not only meets my 
views of what a Life Insurance Agent should be, and do, but it cer- 
tainly is a work very much needed among the ' Profession.' In my 
judgment Companies would do good service to their cause by putting 
a copy into the hands of every agent they commission." 

Another writes : " It is indeed invaluable." 

Another writes : " Candidly, I do consider your book a necessity to 
every Life Assurance Agent, and impress this on all my Agents.'' 

Another writes : " So full, apt, and forcible are the numerous hints, 
arguments, and suggestions, with the different items of information, 
contained in the Agent's Manual of Life Assurance, that if one will 
but read and put in practice what is here furnished, he cannot fail of 
success."' 

Another experienced General Agent writes: "Every word is true 
and fitting. Had I read this book four years ago, it would now have 
been worth to me a thousand dollars." 

Another General Agent writes : " The book is worth its weight in 
gold !" 



GRADES AN0 PRICES OF AGENT'S MANUAL 

NEW AND STANDARD LIST. 

EACH 

Grade Xo. 1, square Sto, muslin, antique, blue and gold, tinted paper, $2 20 

do 2, small Svo, muslin, antique, red edges, do J 65 

do 3, l'2mo, flexible covers, white paper, 1 25 

Pocket edition, tint, gilt, flexible mor., with tuck and bolders, 1 75 

OTHER RATES. 

Ten per cent, will be deducted from the above rates where 50 copies or more 
are ordered at a time ; and fifteen per cent, wid be deducted where over 300 copies 
are ordei-ed at a time. Single copies will be sent by mail upon receipt of price as 
above. 

^" In ordering, be particular to specify which grade is wanted; and to send 
the money with the order, thus avoiding the expense of collection. 

If desired, the Company's imprint, and also that of the General Agent, if so 
requested, will be added, without expense, where fifty or more copies of any one 
grade are ordered at a time. The Company's Tables, tfec, will be added, if desired, 
at bare cost of composition and stereotyping, where not less than 100 copies are 
ordered at a time. No charge for extra press-work or paper. 

To any President or General Agent desirous of introducing the work (with a 
view to its circulation if approved), a copy, in flexible covers, will be s&at free, 
upon application to the publishers, enclosing the postage, and specifying the 
intention. 

Circulars, fully describing the work, will be furnished to all who will be so 
State the number of Circulars wanted. 

(OYER. - ) 



AMERIGAW 

Maii.nl ©f Life Assurance. 

BY THE AUTHOR OP THE AGENT'S MANUAL OF LIFE ASSURANCE. 

This little book of 54 pages 12mo, lias been wonderfully successful 
as a canvassing document. An Agent says : " It hits every time." 

Price, in illuminated covers and tinted paper, single copies, and 
less than 1000, 18 cents each ; 1000 copies and less than 5000 copies, 
15 cents each ; 5000 copies or over, 13 cents each. No charge for 
inserting Company's matter, except type-setting. Address as below, 
being careful to designate American Manual (to distinguish from 
Agent's Manual). Send money with orders. 

(H3§r The author has prepared a small condensed German edition 
of the American Manual, which can be furnished in beautilul style, 
with the Company's matter, at from $00 to $80 per 1000 copies. 
Substantially the same in English can be used in a Prospectus, and 
will be furnished at the same price. Sample copies for examination, 
of either the English or German, will be sent upon application. 



The Publishers announce as now ready, a new and elegant pictorial 
work, of thirty-six pages, by the same author : entitled 



Uttiiratefe : 



A FAMILY BOOK. 

The design has been to make a book which will not get into the 
scrap basket. It has 1G beautiful engravings, illustrating every point 
of Life Assurance, and reading matter to inform the mind and incite 
to immediate action. Canvassers will find it effective. It is furnished 
in the same size and style as the American Manual, at the same price. 
In a larger size as follows : single copies and less than 1000, 20 cents 
each ; 1000 or over, 18 cents each. Company's matter added at cost 
of composition. Sample copies for examination sent upon receipt of 
15 cents. 

Orders for any of the above works must be sent to 

WYNKOOP & HALLENBECK, 
PRINTERS AND PUBLISHERS, 
P. 0. Box, 2477. 113 Fulton St., New York. 

gST" SEE BACK OF BO-0-K..^gJ 



THE INSURANCE 



Guide and Hand-Book 



ON 



Fire, Life, Marine, Tontine, and Casualty Insurance. 



BY y 

CORNELIUS WALFORD, 
Of London. 



AMERICAN EDITION, 

WITH 



REVISIONS AND EXTENSIVE ADDITIONS,^/* ^ 



ADAPTING IT TO AMERICAN USE, 



BY THE AUTHOR OF THE 



"AGENTS' MANUAL OP LIFE ASSURANCE," "AMERICAN MANUAL OF LIFE AS- 
SURANCE," "LIFE ASSURANCE ILLUSTRATED," "WORDS TO 
BUSINESS MEN," ETC., ETC. 






New-York : 
WYNKOOP & HALLENBECK, 113 FULTON STREET. 

1868. 







Entered, according to Act of Congress, in the year 1868, by 

henrI C. FISH, 

In the Clerk's Office of the District Court of the United States for the District of New-Jersey. 



DEDICATION. 



M 



RIBUTE TO NSURANCE, 



' Insurance may justly be deemed one of the noblest creations of 
human genius. From a lofty height it surveys and protects the com- 
merce of the world. ■ It scans the heavens ; it consults the seasons ; it 
interrogates the ocean, and, regardless of its terrors or caprice, defines its 
perils and circumscribes its storms. It extends its cares to every part 
of the habitable globe ; studies the usage of every nation ; explores every 
coast ; sounds every harbor. To the science of politics it directs a sleep- 
less attention; it enters the council of monarchs — watches the delibera- 
tion of statesmen, weighs their motives, and penetrates their designs. 
Basing upon these vast materials its skilful calculations, and sure of the 
result, it thus addresses the hesitating subject : " Dismiss your 
anxiety and fears ; there are misfortunes that humanity may deplore 
but cannot prevent or alleviate : such are not the disasters you 
dread. Trust in me, and they shall not reach you. Summon 
all your resources, put forth your skill, and with wif altering cour- 
age pursue your avocation. Succeed, your riches are enlarged ; fail t 
they shall not be diminished, for my wealth shall supply your loss. 
Rely on me, and, for your sake, at my bidding, the arm of your enemies 
shall be paralyzed, and the dangers of the ocean or the land shall cease 
to exist." He listens, obeys, and is rewarded. Thousands follow his 
example, and the quarters of the world approach* each other, and are 
bound by the permanent ties of mutual interest and mutual benefits? — 
Report of the French jurists. 

Am. Ed. 



Note to American Edition, 



The Publishers feel assured that this volume will be well 
received. No foreign popular treatise upon the science and 
progress of Insurance, by unanimous consent, holds so high 
a place as the " G-uide and Handbook." Hitherto it has 
been imported at much expense, and has been universally 
regarded as defective, from the absence of facts as to Insurance 
in America. The edition we issue is every way adapted to 
use in the United States. Not a sentence of the English 
Edition, of any conceivable value whatever, is omitted, while 
the additions amount to over one hundred and fifty pages. It 
now contains the fullest exhibit of facts, arguments, and illustra- 
tions connected with Fire, Marine, Life, Tontine, and Casualty In- 
surance, in all time, and in all parts of the world, of any work ever 
published. Indeed, the owner of this volume has AN insu- 
rance LIBRARY IN ONE BOOK. 



CONTENTS 



DIVISION I. 

RISE AND PROGRESS OF ASSURANCES. 

CHAPTER I. PAGES 

General Review; Marine Insurance; Casualty Assurance; Annuities, Tontines, 

etc. ; Fire Insurance 5-17 

CHAPTER H. 
Life Assurance 18-27 

CHAPTER m. 
Speculative Assurances 28-35 

CHAPTER IV. 
Transition Period 36-48 

CHAPTER V. 
The Golden Age of Assurance Companies 49-53 

CHAPTER VI. 
Bubble Companies 54-63 

CHAPTER VH. 
Limited Liability Companies ; Chronological Table ; Table of Life Assurance Offices 
which have ceased to exist since 1844, and what became of them ; Life Offices 
which have changed their names 64-73 

DIVISION II. 

POFTTLAR NOTES ON THE IAWS OF MORTALITY. 

CHAPTER I. 
Popular Notes on the Laws of Mortality, as bearing upon Life Assurance ; also, on 

Population and Longevity 74-85 

CHAPTER n. 
Births and Birth-places of the People 86-91 

CHAPTER HI. 
Marriage and its Influences 92-98 

CHAPTER IV. 
Deaths— their Number and Causes . , 99-110 

CHAPTER V. 
Progress of the Population 111-122 

CHAPTER VI. 
Results of the Census , ., . 123-132 

CHAPTER VH. 
Longevity... ........ ... .. , „.. 133-155 



IV CONTENTS. 

DIVISION III. 
THEORY AND PRACTICE OF LIFE ASSURANCE. 

CHAPTEK I. pages 

Mortality Tables, their Uses, Construction, and Differences ; Northampton Table ; 
Carlisle Table ; Equitable Society Experience Table ; Government Tables ; " Ex- 
perience Table ; the " English" Life Tables ; Deparcieux's (French) Table ; Expe- 
rience of Mutual Life Company of New- York ; Experience of Royal Insurance 
Company 156-192 

CHAPTER n. 
The Theory and Practice of Life Assurance, continued 193-199 

CHAPTER III. 
Interest Historically Considered, 200-212 

CHAPTER IV. 
Following out the Practice of Life Assurance 213-221 

CHAPTER V. 
Capital, and its Uses 222-226 

CHAPTER VI. 
Discussing the Relative Advantages of the Mutual, Proprietary, and Mixed Systems . 227-231 

CHAPTER VII. 
Expenses of Management 232-237 

CHAPTER VIII. 
Selection of Lives 238-246 

CHAPTER IX. 
Improvements in the Practice of Life Assurance : 1 and 2. Moderate Rates" of Pre- 
mium — Non-bonus giving Offices ; 3. Extension of the Limits of Foreign Resi- 
dence ; 4. Suicides ; 5. Surrendered and Lapsed Policies ; 6. Diseased Lives ; 7. 
Increasing and Decreasing Rates ; 8. Half Credit System ; 9. Loans with Life 
Assurance ; 10. Prompt Settlement of Claims 247-254 

CHAPTER X. 
Pretended Improvements in the Practice of Life Assurance : 1. Immediate Indis- 
putability ; 2. The Half Credit System ; 3. Loans on Personal Security ; 4. Edu- 
cational and Misfortune Funds, etc 255-264 

CHAPTER XI. 
Further Improvements Desirable : 1. Settlement of Claims ; 2. Deaths by Suicide ; 

3. Indisputable Policies ; 4. Substitution of Lives 265-268 

CHAPTER Xn. 
Rates of Premium, Method of Determining them, and Tables of Rates of all the Ex- 
isting Offices ; Annual Premiums for Assuring £100 269-300 



DIVISION IV. 

BONUSES. 

Bonuses : How Derived, and the Proper Times and Manner of Declaring them. 301-303 

CHAPTER I. 
Sources of Surplus in an Assurance Office „ 304-312 



CONTENTS. V 

CHAPTER EC. pages 

Objects and Mole of Ascertaining the Surplus 313-318 

CHAPTER HI. 
Periods for Investigation and Distribution of Surplus, and Proportions Distributed ; 

Proportions of Profits Divided 319-325 

CHAPTER IV. 
The Mode of Distributing the Surplus: 1. Per centage on Premiums Paid ; 2. Per 
centage on Sums Assured ; 3. Per centage on Sums Assured, and Additions ; 4. 
Fixed Periodic Additions ; 5. The Tontine Principle ; 6. On Sums in Deposit ; 7. 
On the " Charge " or " Loading ;" Tontine Bonuses ; Non-bonus Plan ; Expla- 
nation of Bonus Table 326-344 

CHAPTER V. 
The Finance of Life Assurance 345-358 

CHAPTER VI. 
On the Exclusion or otherwise of the " Loading " from Valuations 359-366 



DIVISION Y. 

LIFE ASSURANCE AS AN INVESTMENT. 

Life Assurance as an Investment, including the Purchase of Life Policies, and Spe- 
culations in Insurance Shares 367 

CHAPTER I. 
Life Assurance as an Investment ; Interest— its Effect on Investments 368-381 

CHAPTER n. 
Purchase of Life Policies— Mode of Ascertaining their Value ; Tables of Values 382-406 

CHAPTER HI. 
Insurance Shares as an Investment 407-413 



DIVISION VI. 

M I S C EL JL A N E O TTS . 

CHAPTER I. 

Guide to the Selection of an Assurance Office ; Catechism of the Points upon which 

InsuranccAgents should be informed, and should be able to impart information . 414-431 

CHAPTER n. 
Publication of Accounts— Legislation for Insurance Offices 432-439 

CHAPTER III. 

Agents' Chapter, containing special instructions for Agents as to making their 

Agencies Profitable 440-442 

CHAPTER IV. 
The Practical Working of Insurance Agencies, 443-448 



VI CONTENTS. 

DIVISION VII. 

S TT P P Jj E M E N T A It Y. 

CHAPTER I. 

Marine Insurance — Origin of Underwriting ; Rise and Progress of Marine Insur- 
ance; Statistics of Disasters on the Lakes; Losses at Sea; Marine Insurance on 
California Coast ; Board of Lake Underwriters ; Total Wrecks and Loss in Two 
Years ; Good Suggestions to Marine Companies ; New- York Marine Insurance 
Statistics for 1868 : 449^61 

CHAPTER n. 

Fire Insurance— Its Scientific Basis ; Early Struggles of Fire Insurance ; Official 
History of New- York Fire Companies; History of Massachusetts Insurance 
Operations; Fire Companies and Business in Massachusetts; Aggregate of 
Joint-Stock Companies ; State Action and its Benefits ; National Board of Fire 
Underwriters ; Form of Fire Policy adopted by the National Board of Under- 
writers ; Value of Fire Insurance ; Fires in Paris ; Recent Losses by Fire ; 
Philadelphia Fire Operations; Fires in New- York; Total Losses by Fires in 
United States ; The Insurance Crisis ; Unlimited Insurance an Encouragement 
to Arson and Incendiarism ; Good out of Evil ; San Francisco Fire and Marine 
Insurance Companies ; Fraudulent Insurance ; California Insurance Law ; The 
Moral Hazard of Fire Insurance ; Insurance Statistics of "Wisconsin for 1867 ; 
The Ohio Insurance Report ; Inventions for Extinguishing Incipient Fires ; 
Uniform Fire Policies Compulsory ; American Insurance Companies in the 
Dominion ; Physical and Moral Causes of Fires ; Dangers and Safety of Fire 
Insurance ; A Good Fire Underwriter ; Recent Valuable Fire Statistics— Rela- 
tive Standing of New-York Companies 463-508 

CHAPTER HI. 

Life Assurance : Names, Location, Officers, and Date of Origin of all Companies 
in the United States : Present Position and Business of the Companies ; Rapid 
Growth of Life Business in America ; Important Statistics of Mortality in the 
United States ; Ratio of Deaths in Europe ; Diseases, and Causes of Death ; Vi- 
tal Statistics of the Mutual Life Insurance Company of New- York for 25 years ; 
Mathematical Demonstration of the Contribution Plan ; Constitution of the Ac- 
tuarial Board of the Chamber of Life Insurance of the United States, adopted 
May 20, 1868 ; Facts in Human Life ; The Critical Periods of Human Life ; Trans- 
mitted Longevity ; The Solicitor ; The Canada Life Insurance Law ; Life Insur- 
ance for the Poor ; The Influence of Occupation on Longevity ; How can I be- 
come a good Agent ? Excess of Male Population ; Who Resort to Life Assur- 
ance ; Importance of Public Records ; Standard Mortality Table of New- York ; 
Necessity of Accumulation ; Life Insurance Contrasted with Fire Insurance and 
Savings-Banks ; Savings-Banks and Life Insurance ; Life Assurance as Related 
to the Family ; Life Insurance Business in Russia ; German Life Insurance Lite- 
rature ; The American Physique ; Voice of the Press ; Marriage Favorable to 
Long Life ; Valuation of Policies ; Eighty Life Assurance Gems ... 509-550 

CHAPTER TV. 

Tontine Insurance : Its Derivation and Early History ; Different Systems of Ton- 
tines ; The German System ; The French System ; Statistics of European Ton- 
tines ; The American System ; Advantages Claimed 551-555 

CHAPTER V. 
Accident Insurance : Theory of Probabilities ; A Public Benefit ; What it Pro- 
poses ; Who Needs an Accident Policy ; A Retrospect ; Admonitory Facts ; Ac- 
cidents in Cities ; Risks to Human Life on Railways ; New Hazards ; A Note of 
Caution ; Statistics of 1866 ; A Calamitous Record ; Fatal Accidents ; Valuable 
Statistics of Accidents— Returns from Europe and the United States. 556-563 



THE 

INSURANCE GUIDE AND HAND-BOOK. 



DIVISION I 



PROGRESS OF LIFE AND OTHER ASSURANCES. 



CHAPTER I. 

GENERAL REVIEW. 

The various systems of Insurance and Assurance* as now 
practised, are mostly of modern adaptation ; and although some 
of them have arrived at a great point of development, the progress 
has been slow, and sometimes involved in mystery. It is more 
than probable that our own good King Alfred, amongst the many 
wise laws and institutions he originated for his subjects, laid 
down the first principles of mutual association and combination 
for good purposes. At all events it is quite clear " that associa- 
tions founded on mutual principles, in which union for good or 
for ill, and in which provision was made for contingencies, were 
the prominent features, are to be found in our Saxon annals." 
This is the dictum of Mi\ Francis,f who has been at some pains 
to investigate the subject. He continues, " the axiom that ' union 
is strength,' the necessity of providing for casualties by Mutual 
Assurance, in other words,* Assurance on its broadest and most 
rational basis, was practised in the Saxon Guild, the origin of 
which was very simple. Every freeman of fourteen being bound 

* A useful, if not always practicable^ distinction between the two has been set up. "Assu- 
rance is a contract dependent on the duration of life, which must either happen or fail. In- 
surance is a contract relating to any other uncertain event which may partly happen or partly 
fail : thus, in adjusting the price for Insurance of houses and ships, regard is always had to 
the chance of salvage arising from partial destruction.' 1 — Babbage. 

t Francis 1 Annals, &c, of Life Assurance, 1853. Whatever may be thought of Mr. Fran- 
cis' book, taken as a whole — and it has been very severely criticised — it certainly presents 
amongst a great deal of romance some useful information regarding the development of the 
Science of Life Contingencies in this country, and such as we have not met with in more 
learned performances. As a History of the Science of Life Contingencies its claims are but 
very slender. 



6 ANTIQUITY OF MARINE INSURANCE. 

to find sureties to keep the peace, certain neighbors composed of 
ten families became bound for one another, either to produce any- 
one of the number who should offend against the Norman law, or 
to make pecuniary satisfaction for the offence. To do this they 
raised a fund by mutual payments, which they placed in one 
common stock. This was pure Mutual Assurance. From this 
arose other fraternities." Of the nature of these other fraternities 
we may give one or two examples. Here is one of the rules of 
the St. Catherine's Guild : — " If a member suffer from fire, water, 
robbery, or other calamity, the Guild* is to lend him a sum of 
money without interest." . By the regulations of a similar society 
at Exeter, "When any member is about to go abroad, each of his 
fellow-members shall contribute five-pence ; and if any member's 
house is burnt, one penny." These rules read as fresh as if they 
were only just certified by the hand of our immortal Tidd Pratt. 
Here is one of another kind taken from a Cambridge society of 
Saxon date :- — " If any one shall take away the life of a member 
his reparatory fine shall not exceed eight pounds ; but if he obsti- 
nately refuse to make reparation, then shall he be prosecuted by 
and at the expense of the whole society ; and if any individual 
undertake the prosecution, then each of the rest shall bear an 
equal share of expenses. If, however, a member who is poor kill 
any one, and compensation must be made, then if the deceased 
was worth 1,200, shillings, each member shall contribute half a 
mark [equal in weight to about £2 Is. 3d. of our silver coinage] ; 
but if the deceased was a hind, each member shall contribute two 
oraa [equal to 10s. 4d. present coinage] ; — if a Welchman only 
one!" 

It is known that after the conquest, Guilds were established for 
the express promotion of religion^ charity, or trade ; " and from 
these fraternities " (says a modern writer) " the various Compa- 
nies and City Corporations have arisen." In none of these early 
societies, however, do we observe any risks undertaken other than 
those against such casualties as could be taken easy note of. The 
doctrine of probabilities, as applying to the higher class of risks, 
had still to be developed. We fully agree, however, with Mr. 
Hendriks (the talented Actuary of the Globe Insurance Company) 
that "the non-existence in ancient times of the theory of probabi- 
lities as a science, or as anything beyond a philosophical idea of 
the weight of testimony, cannot be accepted as a reason for the 
unlikelihood of the early practice of Insurance." 

MARINE INSURANCE. 

It is now admitted by all writers that Maritime casualties were 
the first to which the principles of Insurance (as distinguished 
from the friendly contributions before referred to) were applied. 
So far back as the year 1435 the magistrates of Barcelona issued 
an Ordinance relating to this class of Insurance, which we have 
good authority for stating " should be reputed as the first instru- 



FIRST STATUTE RELATING TO MARINE INSURANCE. 7 

ment of legislation known up to that period in Europe." Mr. 
Lewis Pocock, in his interesting book on Life Assurance, says — ■ 
"The proportionate hazard of different voyages which constituted 
the essentia] quality of Marine Insurances appears, however, to 
have been understood so early that something approaching to the 
principle seems to have been employed in the later ages of Rome, 
by which vessels lost at sea or taken by the enemy were to be re- 
placed, in return for supplies furnished to the army in Spain. 
This agreement of indemnification," he continues, "may be consi- 
dered an Assurance, though defective in the modern condition of a 
premium" But a no less legal authority than the late Mr. Baron 
Parke held that this bore " no resemblance to the contract of In- 
surance, for it is (he says) nothing more than every well regulated 
State is bound to do by the ties of natural justice." And he adds, 
" it is equitable and right that those who in times of public dan- 
ger appropriate their private wealth to the advancement of the 
public service, should be reimbursed from the purse of the State 
for the losses they may sustain." We will not add to the num- 
ber of writers who have already entered the ranks of controversy 
on this question, but will take the award of Mr. Hendriks (after 
he bad fully investigated the claims on both sides) as just and 
equitable between them, viz., that the contract of nautical inte- 
rest, or loan on bottomry, or respondentia,* was used from very 
remote ages by the Greeks, Romans, and other nations, as their 
ordinary Insurance contract, which end it perfectly answered; 
and that eventually it formed the traditionary groundwork on 
loliich arose the superstructure of the Insurance system of modem 
Europe. And this is the point we seek to arrive at. 

In the 16th century the principle of Marine Insurance is known 
to have existed in Italy, the Netherlands, and Britain. The ear- 
liest mention of it occurs in 1548, in a letter written by Protector 
Somerset to his brother the Lord Admiral. That it was commonly 
understood in 1558 may be gathered from the speech of Lord 
Keeper Bacon, on opening Queen Elizabeth's first parliament, 
wherein he said, " doth not the wise merchant in every adventure 
of danger, give part to have the rest assured ?" In the 17th century 
the Lombards, who had settled in this country a century or two 
previously, greatly distinguished themselves in this branch of 
business ; and Marine policies, issued at Antwerp, so early as 
1620, were expressed to be made "according to the custom of 
the Lombards, in Lombard Street, London."f 

The first English statute relating to Marine Insurance was 
passed in 1601. It is entitled "An acte concerninge matters of 
Assurances amongste merchautes," and its preamble furnishes 
some information strictly to our present purpose : 

" Whereas it ever liatlie bene the policie of this realme by all good means 
to coinforte and encourage the mercliante r therebie to advance and increase 

* These terms are hereafter more fully explained, 
t G. D. B. Beaumont on the Law of Insurance. 



8 ORIGIN OF MARINE INSURANCE. 

the generall wealth of the realme, her Majestie's customes, and the strength 
of shippinge, which consideration is no we the more requisite because trade and 
traffique is not at this present soe open as at other tynies it hathe bene. And 
whereas it hathe bene tyme out of mynde an usage amongste merchantes, bothe 
of this realme and of forraine nacyons, when they make any greate adventure 
(speciallie into remote partes) to give some consideration of money to other 
persons (which commonlie are in no small number) to have from them assu- 
rance made of their goodes, merchandizes, ships, and things adventured, or 
some parts thereof, at such rates, and in such sorte as the parties assurers 
and the parties assured can agree, which course of dealinge is commonlie 
termed a politic of assurance ; by means of which policie if it cometh to passe, 
upon the losse or perishinge of any shippe, there followethe not the undoinge 
of any man, but the losse lightethe rather easilie upon many, than heavilie 
upon fewe, and rather upon them that adventure not, than those that do ad- 
venture ; whereby all merchantes, speciallie the younger sorte, are allured to 
venture more willinglie and more freelie." 

It then enacts certain regulations to be observed for the advan- 
tage of both assurers and assured. 

It has been asserted, with some show of authority, that we are 
indebted to the Jews for the origin of Marine Insurance. The 
French writers especially have taken this view. They fix the 
date of the invention 1182, when the Jews were banished from 
France, and " took that mode to facilitate and secure the removal 
of their effects." The Lombards, these writers assert, " were not 
idle spectators of this contrivance." They adopted it, and as we 
have already stated, " in a short time improved it considerably." 
We quote from Mr* Baron Parke. The authorities he consulted 
affirmed that the Jews, upon this occasion, invented Sills of Ex- 
change, but he found none which credited them with having ori- 
ginated policies of Insurance.* 

The first attempt to organize a corporation for the purposes of 
this branch of Insurance, of which we have any record, was made 
in Holland, under the sanction and support of governmental au- 
thority, and dates no further back than the commencement of the 
17th century. In 1629 the States General presented to the depu- 
ties of the various provinces the plan of a general chamber or 
Company of Insurance^ urging that " they were persuaded that 
this Company or General Chamber of Insurance, once put into 
train, the merchants could carry on a much securer trade by sea 
than heretofore ; and that besides, it would afford a means of re- 
leasing the provinces from the large extraordinary subsidies 
which the latter declared they could no longer continue." The 
plan was to be made compulsory under pains and penalties of the 
severest nature. It provided specific rates of premium for voyages 
to and from the chief foreign ports. The Proprietors and Direc- 
tors were to be responsible to the extent of their subscribed shares. 
The States General were to subscribe four millions of florins, two- 
thirds on account of their share in the risks of profit and loss, 
the remaining third being ceded as a gift to the Company ; and 
it was intended to make it a trading as well as an Insurance 

* Vide Assurance Magazine, Vol. IL, p. 145. 



leybourn's panarithmologia. 9 

Company, giving it a monopoly of the Dutch trade in the Levant. 
The merchants to whom the matter was referred " unanimously 
determined that such a Company would be disadvantageous to 
the general commerce of those provinces, and burdensome to those 
branches of trade in particular, and to that which is more espe- 
cially devoted to the fitting out and freighting of ships."* And so 
the matter ended for a time. 

The following passage from Leybourn's Panarithmologia, pub- 
lished in 1693, explains quaintly enough the practice of Marine 
Insurance at that period, and the value in which it was held. 
"Assurance (he says) is when you are in any manner of fear of 
the ship your goods are in, or the danger of the voyage, or of 
pirates, <fcc. You then are willing to give another man a certain 
sum of money to put himself in your place, and if any danger 
arises, to pay you for the same goods the value that you have as- 
sured. It is a thing that hath been long in custom and use amongst 
traders, and was established by law under Claudius Ccesar, before 
the birth of Christ ; it hath been much practised in all trading 
nations, and is a cause of great increase of trade, because that 
hazard is borne by four or fivef with mutual consent, which oth- 
erwise must fall upon one person. The nature of it is thus: Sup- 
pose you ship £300 of goods for Jamaica, you being unwilling to 
run so great a hazard yourself; you go to the Assurance Office 
behind the Royal Exchange, in London, and there acquaint the 
clerk you will ensure for £200, or £250, or if you will, the whole 
£300, (for you may ensure the whole or any part) upon such a 
ship, for so much goods as you have on board." 

But in those days, as now, dishonest practices had crept in, and 
had to be guarded against by those who granted insurances, 
while those who insured had to see that they committed their 
risks to honest and trustworthy persons : hence these additional 
observations were made by the same writer : — " Those assurances 
are most dangerous when they have the words inserted, lost or 
not lost, which is commonly done when a ship hath been long 
missing, and no tidings can be had ; the premiums (especially in 
time of war) will run very high, sometimes 30 or 40 per cent., 
and although it happens at the time that the subscription is made, 
the ship is cast away, yet the assurers must answer the loss to 
the insured. But if the party that caused the insurance to be 
made saw the ship wrecked, or had certain intelligence, such sub- 
scription will not oblige the same, being accounted mere fraud. 
So, likewise, if the assured, having a rotten vessel, shall assure upon 
the same more' than she is viorth, and afterwards give orders, that 
going out of port she should be sunk or wrecked, this will be frau- 
dulent and not oblige the assurers to answer. So soon as you hear 
of a certain that a loss has happened, you must inquire at the 
office for the insurers (if you know them not) and acquaint them 

* Vide Mr. Hendriks' excellent papers in 4th Vol. of Assurance Magazine, 
t In Marine Insurance sometimes four or five persons called "underwriters" take the 
risks upon themselves, sometimes only one, but at other times 20 or 30. 



10 THE PARLIAMENTARY COMMITTEE IN 1720. 

of the loss, and how you came to know it, and desire them to in- 
form themselves of the truth of it if they please, and are not 
satisfied with your report. When they are satisfied there is a 
real loss, there is generally an abatement of 10 per cent, for 
prompt payment ; for if they are punctual men, and value their 
reputations, they will presently pay you ; if not they will shuffle 
you off, and endeavor to find out flaws, and raise scruples for a 
larger abatement than ordinary, and sometimes will keep you a 
year or two out of your money, and many times never pay ; but 
generally get in case of loss 15 or 20 per cent, abated ; I have 
known 40 per cent, abated on very small pretensions, which 
makes a common proverb about such insurers : — What is it worth 
to insure the assurers? Be careful, therefore, to deal with honest 
men that value their reputation, when you have anything to be 
insured !" This advice of the seventeenth century stands in equal 
force and virtue in the nineteenth. 

In 1720 a Parliamentary Committee sat to inquire into the 
practice of Marine Insurance as then existing ; complaint having 
been made to the Government that " several unjustifiable projects 
and undertakings, whereby great mischief might accrue to the 
public," were being entered upon. The various petitions, counter- 
petitions, and affidavits presented to, and examined by, this Com- 
mittee, furnish valuable evidence of the position of this class of 
business at the commencement of the last century. It may be 
noted that this was the first Parliamentary Committee on Insur- 
ance matters in this country. ■ 

The first petition examined was dated 25th January, 1719, and 
bore the signature of 286 merchants and traders, headed by Sir 
Justus Beck, of Leadenhall Street, praying for the establishment 
an Incorporated Company of Insurers with a Joint Stock, and its 
argument avers that such a company would preserve many of his 
Majesty's "good subjects and their families" from that ruin to 
which they were exposed by being assurers in a private capacity. 
A counter-petition was got up by the underwriters, who were na- 
turally alarmed at this step, signed by 375 persons, headed by Sir 
Gilbert Heathcote ; the gist of this objection being that the estab- 
lishment of a corporation would lead to undue preference, and to 
delay and refusal to insure when ships might be missing and in 
stormy weather. The British merchants also came forward with 
an adverse petition, urging that insurance business was in a satis- 
factory condition, the premiums charged in London and Bristol 
being lower at that time than in any other part of Europe. It 
was also stated that the scheme was originated simply for the 
purposes of stock-jobbing ; and that as many families were sup- 
ported by the then existing system, there was " no reason to 
destroy them without absolute necessity." 

It was alleged by the supporters of the petition that there were 
great losses by private insurers: so much so that it had become 
customary (as hinted by the author just quoted) in many cases to 



THINGS WELL ENOUGH AS THEY WERE. 11 

insure the insurers: a precaution not unnecessary it would seem, 
for we have it on the authority of Adam Smith, that a list was 
laid before the Attorney-General of one hundred and fifty private 
insurers toho had failed in the course of a few years just previously 
to this period !* And it was further stated that previously to 
that time many English merchants had insured at Hamburgh for 
greater safety ! Further still, one Robert Fletcher, a merchant, 
r made solemn affidavit and said, " that being lately in Holland, 
and frequently in conversation with several merchants there, and 
often discoursing of a subscription then going on in London to- 
wards a fund for insuring ships and merchandise, they very much 
approved of the project, believing that if completed it would be 
a better security for the insured than any method in practice at 
the time." 

But all this was of no avail. The attorney and solicitor- 
general to whom the petitions were ultimately referred, reported 
to the King after the following fashion : — " That the business of 
Insuring ships had always been carried on as it then was ; that 
there was no Corporation in Europe for Insuring ships ; and that 
the making an experiment in a thing of the sort, if it should 
prove amiss would be of the utmost consequence to trade. Fi- 
nally, that they could not advise the erection of a Corporation 
against tohich there were so many and great objections : and espe- 
cially the method then used being approved of both at home and 
abroad !"f 

On what grounds the statement of the approval "at home" was 
based, we know not. We find a merchant writing soon after this 
period, " that the making of Insurance" had " vastly increased ; 
for gamesters," he continues, " wagerers, and cunning fellows, who 
pretend to deal in speculation, began to be almost as much con- 
cerned as the merchants ; so that a policy of insurance in a short 
time acquired rather the effect of a box of dice, than a contract to 
secure trade ; and as gamesters seldom play fair after a few of the 
first games, it was not long before foul play in assurances began 
to appear, and which has ever since continued increasing, inso- 
much that it is now almost as common to hear of a wilful and 
fraudulent, as of an inevitable, loss at sea." It is also worthy of 
notice, as indicative of the period, that on the matter of these 
petitions being introduced in the House of Commons soon after- 
wards, Sir William Thompson entered into long explanations how 
" one Bradly" and " one Billingsley had endeavored to bribe 
him and Sir Edward Northey, not only in this but also in 
another undertaking called ' The Lord Onslow's Insurance.' "J 
Messrs. Bradly and Billingsley were the agents employed for ob- 
taining the charters for these projects. Several years previously 
(1716) these learned gentlemen had concocted a scheme for a 

* Wealth of Nations, 5th Edit. p. 146—148. 

+ Vide, Mr. Hendriks' valuable papers on the First Parliamentary Committee on, Insw 
ranee.— Assurance Magazine, Vol. IV: 
% Vide Assurance Magazine. 



12 PETITIONS TO THE KING FOE CHARTERS. 

" public Assurance Office, with one or two millions of capital," 
which project also fell to the ground. 

Such were the circumstances, and such the fate, of the first at- 
tempts to establish Corporations for Marine Insurance in this 
country. But the tables were soon to be turned. That which 
flattery, the bribery of officials, or the requirements of commerce, 
had alike failed to obtain, was still to be had at a price. Money 
was the motive power ; but it must come in large force in order 
to take proper effect. 

The various schemes which we have just passed under review 
had, as may be supposed, excited considerable attention in the 
mercantile world. Notwithstanding the learned opinions of the 
attorney and solicitor-general to the contrary, there was a very 
strong feeling growing up in favor of a change from the then ex- 
isting system, with its many acknowledged defects, to something 
better, and the plan of a corporation appeared more feasible and 
practicable than anything else that had been suggested. Hence 
we need not be surprised to find, in a very short period, a revival 
of the attempts in this direction. So it was : within one year 
from the former defeats two fresh schemes had been organized, or 
rather, perhaps, two of the old ones had been reorganized, and 
appeared under the respective titles or cognomens of " Lord On- 
slow's " and " Lord Chetwynd's " Insurance projects ! Their pro- 
moters immediately set to work to obtain parliamentary powers, 
and how they obtained them has been eloquently narrated by 
another pen : — By some inadvertence the grand committee of 
supply had been dismissed before provision could be made for the 
arrears m the civil list. The ministers were in despair, and the 
Companies took advantage of the necessities of the State, to offer 
the large sum of £600,000 on condition of receiving his Majesty's 
charter for their respective Companies. The offer was eagerly 
grasped by the Ministry ; and on evidence being given of the re- 
spectability of the members, of the cash lodged at the Bank to 
meet losses — of their funded property — and of the amount of busi- 
ness transacted, Mr. Aislabie,* Chancellor of the Exchequer, pre- 
sented to the House the following message : — " His Majesty hav- 
ing received several petitions from great numbers of the most 
eminent merchants of the City of London, humbly praying that 
he would be graciously pleased to grant them his letters patent 
for erecting Corporations to assure ships and merchandise, and 
the said merchants having offered to advance and pay a conside- 
rable stem of money for his Majesty's use, in case they may obtain 
letters patent accordingly y his Majesty being of opinion that 
erecting two such Corporations, exclusively only of all other Cor- 
porations and Societies for assuring of ships and merchandise, 
under proper restrictions and regulations, may be of great advan- 
tage and security to the trade and commerce of the Kingdom, is 

* This man was afterwards expelled the House of Commons and committed to the Tower- 
not, however, we believe, in connexion with any Insurance projects. 



THE " CRUSADERS " AND INSURANCE WAGERS. 13 

willing and desirous to be strengthened by the advice and assis- 
tance of this House in matters of this nature and importance. 
He therefore hopes for their ready concurrence to secure and con- 
firm the privileges his Majesty shall grant to such Corporations, 
and to enable him to discharge the debts of his civil government 
without burdening his people with any aid or supply." 

Of course " the most dutiful Commons " could not withstand 
such potent arguments. A Bill was ordered to be brought in ; 
and shortly afterwards " the most dutiful, <fcc," waited on his 
Majesty with an address of thanks '''■for communicating the ap- 
plication for an Insurance Company" it being " an act of so 
much condescention as deserved the highest return of duty and 
thankfulness /" And so the Companies obtained their charters, 
and the world Marine Assurance Corporations. 

CASUALTY ASSURANCE. 

The next class of Insurance commanding notice was that for 
securing the ransom of persons who had occasion to travel, and 
who were taken prisoners or captives. " In those days," says a 
writer we have before quoted, " there was not merely a risk of 
storm or whirlwind. Man was more cruel than the tempest, and 
the galleys of the Turks were then as much feared by the masters 
of trading vessels as the Corsairs of the Algerine were dreaded at 
a later period." 

Pilgrims to the Holy Land were also accustomed to effect In- 
surance for their personal safety, or ransom. 

This class of Insurance afterwards — if, indeed, it was ever any- 
thing else — degenerated into Insurance wagers. A traveller de- 
parting on these or any long and dangerous voyage, deposited a 
specific amount in the hands of a money or Insurance broker, 
upon condition that if he returned he should receive double or 
treble the amount he had paid ; but, in the event of his not re- 
turning, the money placed in deposit was forfeited. The Act 
against Gambling Assurances proved fatal to this branch of 
business. The author of " Panarithmologia," (1693) before quot- 
ed, says, 

" Other Assurances are made upon goods that are sent by waggon or cart, 
&c., by land, from all robbers or thieves, &c. Other Assurances are made 
upon the lives of men and women at a rate that is moderate ; for by this 
means, if you buy any place or office that is worth £1,000, or more or less, and 
you have not money enough to purchase it, you borrow £400 or £500. Now, 
if you die, and are not in a condition to pay this money, it is lost ; but if you 
.insure your life, then your friend that you did borrow it of, will have his mo- 
ney honestly paid him. Some assurances are likewise made on the heads of 
men ; as if a man going for the streights, and, perhaps, is in some fear that he 
may be taken by Moors or Turkish pirates, and so made a slave, for the re- 
demption of whom a ransom must be paid, he may (ere he goes on ship-board) 
go to the Insurance Office, and advance a, premium accordingly upon a policy 
of assurance ; and if he be taken into slavery in the voyage, the assurer or 
assurers must answer the ransom that is secured to be paid on the policy." 



14 LORENZO TONTI. 

The risks more particularly provided for in the Casualty Insu- 
rance Offices of the present day, are of an entirely different charac- 
ter. They relate to loss of life or limb, or other personal injury 
by accident; to Plate Glass and Hailstone Insurance, and other 
casualties of a similar character ; with which most of our readers 
will be familiar. 

ANNUITIES, TONTINES, &C. 

Next after the granting of Marine and Casualty Insurances, 
followed the system of granting or selling annuities on lives. 
The first description of annuities of which we find any record, are 
Tontine Annuities, so called from having been originated, or, at 
least, made popular, by Lorenzo Tonto, or Tonti, a Neapolitan, 
who nourished about the middle of the seventeenth century. By 
some writers Tonti has been called the Father of Life Assurance. 
This claim can scarcely be admitted ; for, although these annui- 
ties drew attention to the subject of life contingencies, and the 
recorded ages of the annuitants may have afforded valuable data 
for later observations, they were not based upon any certain data, 
but were entirely speculative in their character and intentions. 
The principle of these annuities, on Lorenzo Tonti's plan, was as 
follows : — A certain number of persons clubbed together a speci- 
fied sum (without reference to age or sex), and at the expiration 
of each year the interest of this fund was divided amongst the sub- 
scribers who were living / and so on from year to year, until the 
last survivor received the whole of the interest. 

This novel scheme had all the appearance of a profitable invest- 
ment, until an inquiry was instituted to ascertain what became of 
the principal sum subscribed after the death of the last annuitant : 
the interest fund only having been awarded to the subscribers. 
This inquiry proved fatal to the plan, for it was found that the 
principal sum was appropriated by the founders of the scheme to 
their own uses. When this fact was brought to light, a modifi- 
cation of the system was attempted. A number of years was 
fixed for the continuation of the Tontine, and the entire amount 
originally subscribed was to be received by the member who last 
survived. This plan did not meet with general approbation. It 
possessed great inequalities, as many died without receiving any 
advantage whatever for their subscriptions ; and others, longer 
lived, received, in many cases, nearly three hundred times the 
amount advanced. In 1689, the last survivor of a Tontine in 
France, a widow, at the period of her death, at the age of 96, 
enjoyed an income of 73,500 livres — £3,062 10s. — for her original 
subscription of 300 livres, of the value in British currency of only 
£12 10s. 

The system of Tontines for money gradually merged into what 
were afterwards known as lotteries^ and as such were repressed 
by legal enactment. Even now estates are sometimes purchased, 
or houses erected, on the Tontine principle of all the benefits 



PASCAL AND JOHN DE WIT. 15 

going to the oldest survivor, and afterwards to his or her heirs — 
for women are more often the members or nominees in Tontines 
than men. A Tontine scheme relating to some property in the 
neighborhood of Perth, has recently fallen in; the oldest life on 
the list having been that of a lady who died at Edinburgh last 
year, aged 106. One of the nominees in this scheme, also a female, 
died in 1853, aged 122 years.* 

The famous Tontine scheme for enlarging and improving the 
Town of Folkestone, unfortunately proved a failure. 

We must look to later times than those of which we now speak 
before we find the doctrine of probabilities — originating first of 
all in games of chance — so far developed and perfected as to be of 
any real use in estimating the chances, or expectation, of life. 
Without some such guide it is scarcely to be supposed that any 
number of persons would seek either to sell or to purchase annu- 
ities, otherwise than as occasional speculations. The uncertainty 
would be so great that only the most wary or dishonest would 
succeed. This, indeed, seems to have been the case, for the annals 
of that period teem with records of the doings of one Audley, 
who, although originally only a poor clerk with six shillings a 
week, was " so neat an adept in the tricks of law," and so keen in 
his annuity dealings, which chiefly consisted in purchasing annu- 
ities well secured upon property, that he became one of the rich- 
est men of his time. His mode of action may be best judged of 
by the reply made to one of his victims who accuses him of hav- 
ing no conscience, — ll We monied people must balance accounts. 
If you don't pay me my annuity you cheat me ; if you do, I 
cheat you."f 

Passing from Audley and his Class, of whom there were then, 
as now, too many, we come to notice a man of very different 
character. Pascal, in his celebrated "Provincial Letters," had 
already suggested the application of the teachings of the theory 
of probabilities to iM wants of mankind. These letters were 
read wherever books found their way. About this time the 
States-General were negociating some life-payments, and that 
clever statesman John de Wit, " added one more obligation to 
the many received from that distinguished man by employing 
the theory which Pascal suggested for the requirements of his 
Government." He sought for and investigated all the available 
data of that period, and brought his own experience and great 
power of mind to bear upon the subject, by which means he 
solved problems, and laid down general principles which hold 
good to the present day. His report and treatise on the terms 
of Life Annuities was the first known production of the kind, 
and the lapse of two centuries has not lessened its importance in 
the eyes of learned and competent authorities.! From this time 

* Mary Benton :— her portrait was published in the Illustrated London News about a year 
before her death, 
t Francis' Annals, &c. 
% Vide Assurance Magazine, Vol. ii., where the entire Treatise of DeWit has been (thanks 



v u 



16 OEIGIN OF THE SYSTEM OF FIEE INSUEANCE. 

Life Annuities grew gradually into repute, and most Govern- 
ments have used them as a means of raising money for national 
purposes. The formation of correct tables of mortality at later 
periods has done much to advance and extend the system ; but, 
however much we may claim credit for this, we must always 
remember that to Holland belongs the credit of first applying 
mathematical calculations to political questions, and that l>er 
great statesman was the first who, since the fall of the Roman 
Empire, had attempted to fix the rate of annuities according to 
the probabilities of life. 

FIEE INSUEANCE. 

About the period to which we have now arrived, attention was 
beginning to be directed to the subject of Fiee Insueance. It is 
true, as we have seen, that in the early Saxon Guilds, loss by fire 
was one of the calamities provided against ; but the compensa- 
tion so provided must necessarily have fallen very far short of 
that required in an increasing commercial community. It ap- 
pears also that superstition had some share in retarding the pro- 
gress of Fire Insurance, as in a later age, amongst uneducated 

eople, it has operated against the progress of Life Assurance. 

"r. Pocock found, during his researches, that " some of the very 
earliest proposals for insuring dwellings from fire, although they 
were explained and understood with a degree of sagacity and 
clearness far beyond the time at which they were drawn up, were 
almost regarded as presumptuous schemes, wherewith Provi- 
dence might be tempted, and likely to excite injurious notions 
of the party by whom the security was offered ;" and as an in- 
stance of this feeling, he quotes the reply of Count Anthony von 
Oldenburgh, who, on having a scheme for Fire Insurance, pre- 
sently to be noticed, submitted to him, admitted that the object 
of the plan was good, but considered tha/b if he engaged in it, 
Providence might be tempted, his own (subjects be displeased, 
and himself accused of avarice ! But for this superstitious fear, 
the Germans might have claimed the credit of laying the founda- 
tion of the present system of Fire Insurance. 

The scheme presented to Count Anthony Gunther von Olden- 
burgh, in 1609, was "for the Lords of Estates insuring the houses 
of their subjects against fire, by proposing to them that they 
should either singly or united, set a value upon their houses, and 
for every one hundred dollars of valuation pay him one dollar 
yearly. For this the landlord was to engage, that in case, by the 
will of God, their houses should be consumed by fire, caused 
otherwise than by the misfortunes of war, he should take the loss 
upon himself, and pay to the sufferers as much money as might 
be sufficient to rebuild their dwellings." The author of this de- 
sign, continues Mr. Pocock, "expresses his confidence, that al- 
to the ingenuity and perseverance of Mr. Hendriks) reproduced, after lying hid for nearly 
two centuries. 



EARLY FIRE INSURANCE SCHEMES. 17 

though the losses might at first fall heavy, a considerable sura 
might be thus gradually raised from year to year ; and that if a 
calculation were to be made of the number of houses destroyed 
by fire within a certain space, the loss would not nearly amount 
to the money accumulated in that time. It was, however, recom- 
mended, that not all the houses in every town should be included, 
as their value might prove too considerable ; but only that some 
certain dwellings should be received into the Association," a re- 
gulation which some of the modern offices might take a lesson 
from : for having a number of risks side by side has been the 
cause of winding up several Fire Offices of modern date. 

Mr. Pocock points out, that in the preceding proposal " are the 
essential elements of all insurances : average of loss, and a fund 
provided for repayment by accumulation." Although Count 
Oldenburgh did not carry out this proposal, for the reasons 
stated, he considered that Companies of individuals might do so. 
We do not, however, find records of anything being done with 
this view until near the close of the 17th century. On the 15th 
day of October, 1681, it was declared by an Act of the Corpora- 
tion of London, that an Insurance fund should be formed under 
the direction of a committee, to meet at Guildhall every day, from 
three to six o'clock, for perfecting " the same undertaking to the 
good satisfaction of all persons, both citizens and others, that 
have or shall have any interest in any building there." On the 
16th of the ensuing November it was agreed, at a Court of Com- 
mon Council, "that books should be prepared by the 1st Decem- 
ber following, and lodged in the chamber of London, for receiv- 
ing and entering subscriptions ; and that lands and ground-rents 
to the value of £100,000, should be forthwith settled as a fund to 
insure such houses as should be subscribed for. Also, that there- 
after, as subscriptions should be made, a further additional fund, 
by the premiums which should be received, should be made. The 
premium for insuring brick houses to be £4 per cent., and for tim- 
ber houses £8 per cent. But this (adds the Rev. John Strype, 
who was contemporaneous with the design) would not take, per- 
haps because the credit of the City at this time was but low."* 

The first Fire Insurance Office which actually transacted any 
business in this country was one started in 1696, under the name 
of "The Amicable Contribution" which name was very soon 
afterwards changed for the far more appropriate one of " The 
Hand-in-Hand" The office was founded on the mutual principle, 
and by the 26th of June, 1718, had insured as many as 3,666 
houses. The office is still existing, and is well managed, although 
its business is smaller than some of its later constituted rivals. 

* We have just read, with much interest, Mr. Samuel Brown's paper on Fire Insurance, 
published in the Journal of the Statistical Society, June 1857. His historical facts are based 
upon Mr. F. G. Smith's paper on Fire Insurance, in the edition of the Encyclopaedia Bri- 
tannica, now publishing. They confirm, in all essential respects, those above given, with 
this addition, "In 1681, 1682, and 1683, the Journals of the Court of Common Council record 
the signing of many policies, and refer to the discussions and arguments of their opponents; 
but the city authorities appear to have been soon weary of the scheme, for by a resolution 
of the 13th November, 16S2, the court decided to relinquish the business, to cancel the exist- 
ing contracts, and to return the money accepted for them." Note 1857. 



CHAPTER II. 



LIFE ASSURANCE. 



Having traced the early history of Marine and Casualty Insur- 
ances, Annuity Schemes, and Fire Insurances, we now approach 
the subject more particularly identified with our present purpose, 
namely, the progress of Life Assurance. The progress of other 
schemes of Insurance has undoubtedly prepared the way for that 
of Life Assurance, but still the principle grew slowly, and we 
require to carry back our historical jottings to an early period, in 
order to discover where and when the seeds first germinated. 

We have already disclaimed the intention of disputing with the 
nations of antiquity the merits of originating the theory of Life 
Assurance. This, however, is not to prejudice our right to in- 
quire in how far they may, either directly or indirectly, have 
contributed to the development of the theory of probabilities, as 
relating to the duration of human life. It may be regarded by- 
some as an evidence of the spirit of inquiry; by others as an inci- 
dent scarcely worth the remarking, that Pliny, in his well-known 
observations on the census of Vespasian, and the enumeration of 
the inhabitants of the country between the Apennines and thePo, 
takes especial care to distinguish the number of persons living at 
ages above 100 ; or, as a coincidence worthy of little note, that 
Plato remarked to the effect " that many persons had lived to a 
great age by reason of the serenity of the air, and the almost 
continuous summer prevailing in Egypt and Syria." But when 
we find a later writer (Eusebius) remarking that " the experience 
of a long series had led to the examination of the facts which had 
thus been handed down to his time with greater exactness ;" and 
that about the time of the division of the Roman Empire, a table 
was actually in existence by which annuities could be valued,, 
matters assume a different aspect.* But this part of the subject 
will be further considered in another division : at present we 
must confine our remarks to the progress of Life Assurance in 
England. 

The first parish registers were kept in England in 1538. They 
had been kept long previously in Augsburg and Breslau, though 
it was not till the beginning of the seventeenth century that they 
were general in Europe. " It is worth mentioning," says Mr. 
Francis, " that long ere this, the Paternal Government of Peru, 
kept a register of all births and deaths throughout the country ; 
exact returns of the population being made every year by officers 
appointed by the state." Or look still further back, and we find 
the Romans, from the time of Servius Tullius downwards, " took a 

* For further investigation into these and similar points, see Assurance Magazine, Vol. 
%—H.endrihs 1 Papers. 



THE FIRST ENGLISH WORK ON LIFE INSURANCE. 19 

census every fifth year ; and the right of citizenship was involved 
in any one failing to comply with the requirements of his age, 
name, residence, the age of his wife, the number of his children, 
slaves and cattle, together with the value of his property." But 
as they do not seem to have kept any register of burials, it is pro- 
bable that the chief object of the census was to raise money for 
the purpose of conquest. Even in England, neither the age nor 
the cause of death was inserted in the early parish registers. By 
degrees this second deficiency became supplied, but it was not till 
1728, or nearly two centuries after their first adoption, that the 
ages of the dead were introduced. " John Smart, of Guildhall, 
London, Gent., in the 2nd edition of his admirable Tables of In- 
terest, Discount, Annuities, &c, published in 1726, suggested that 
the parish clerks should make a return of the age of every person 
dying ; and his recommendation had the desired effect. Towards 
the close of the sixteenth century the frightful ravages of the 
plague had caused such alarm in the country, that to " quiet pub- 
lic feeling " the Government of the day wisely thought it desirable 
to publish correct accounts of the progress of the pestilence. 
These were called " Bills of Mortality," and " though they were 
not at first maintained consecutively, they were afterwards found 
so useful as to be continued from 29th December, 1603, to the 
present time." 

The next step in progression was the publication, in the early 
part of the seventeenth century, of " the first English work on the 
subject," entitled " Natural and Political Observations on the Bills 
of Mortality," of which the author was John Graunt, born in 
"Birching Lane." This has been described as "the earliest 
movement in economical arithmetic, and the closest approxima- 
tion to the data on which Life Assurance is founded." His atten- 
tion appears to have been first drawn to the Bills of Mortality by 
hearing " men of great experience in this city talk seldom under 
millions of people to be in London." He found the actual num- 
ber of inhabitants to be about 384,000. It seems he made enemies 
by his book, as others have done who fearlessly aimed at the 
truth ; for when the great fire of London occurred, " he was ac- 
cused of having gone to the reservoir of the New River Com- 
pany, and of cutting off the supply of water !"* 

Many of the observations contained in this book of Graunt's, 
are as curious for their accuracy as for their originality. In one 
place he says, "seven out of every 100 live in England to the age 
of 70." This was probably not far from the truth at that time. 
Dr. Price found, a century afterwards, that in the town of North- 
ampton, the number was ten. The Carlisle Tables show 24 as 
the number. Again, he says in his own quaint way, "the more 
sickly the years are, the less fruitful of children they be ;" and al- 
though the idea was then ridiculed, it has since been found per- 
fectly true ! He laid it down that there were good reasons " why 

* Francis. 



20 JOHN GRAUNT AND SIR WILLIAM PETTY. 

the magistrate should himself take notice of the number of burials 
and christenings." The reasons he assigned, however, were 
hardly of equal importance with the suggestion; one of them 
being to ascertain whether the City of London had " grown big 
enough." Graunt was by no means the only writer of his period 
who entertained grave apprehensions on the subject of the growth 
of London. His contemporary, Sir William Petty, who did much 
to direct public attention towards mortality observations, pub- 
lished an Essay on " Political arithmetic, concerning the growth 
of the City of London, with the measures, periods, causes, and 
consequences thereof." The fears then entertained were rather 
of a political than of a sanitary character ; thus a Statute passed 
in the reign of Elizabeth declares that " such multitudes could 
hardly be governed by ordinary justice to serve God and obey 
her Majesty." Sanitary considerations were not, however, en- 
tirely overlooked, for another statute of that period lays it down 
that " such great multitudes of people in small rooms, being- 
heaped up together, and, in a sort, smothered with many families 
of children and servants, in one tenement, it must needs follow, 
if any plague or any universal sickness come among them, it 
would presently spread through the whole city." Yet in 1581 a 
proclamation was issued forbidding any new buildings. 

It is worthy of note that, at this period, the present order of 
population appears to have been reversed ; and that there were, 
then, more males than females living. In speaking of a peculiar 
disease or epidemic which had arisen, Graunt says, " for since the 
world believes that marriage cures it, it may seem, indeed, a 
shame that any maid should die unmarried, when there are more 
males than females ; that is, an overplus of husbands for all that 
can be wives !" Referring to some calculation he had made regard- 
ing the ratio of increase of the population, he says, "According 
to this proportion, Adam and Eve doubling themselves every six- 
ty-four years of the 5,610 years, which is the age of the world, 
according to the Scriptures, shall produce far more people than 
are now in it. Wherefore the world is not 100,000 years old as 
some vainly assert, nor above what the Scripture makes it." 

The Sir William Petty just referred to, and who was the foun- 
der of the great house of Lansdowne, entered into many curious 
speculations and calculations ; some of which attracted consider- 
able attention at that period. He demonstrated, as he thought, 
conclusively, that the growth of London must stop itself before 
the year 1800 ; and that the world would be fully peopled within 
the next 2,000 years ! But his most elaborate, not to say profane 
one, was " on the number of the quick and the dead who may 
rise at the last day." This numberhe estimated at 20,032,000,000, or 
less " than one-fifth part of the graves which the surface of Ireland 
will afford, without ever putting two bodies into any one grave !" 
That he observed upon the laws of mortality closely there can be 
no doubt, as his basis for the above calculation was one death in 



THE FIRST MORTALITY TABLE. 21 

forty of the population annually, which was not far from the truth ; 
and he was probably about right in saying that London doubled 
itself in 40 years, at the then rate of increase. Howel wrote at 
that period, " that for the number of human souls breathing in 
city and suburbs, London may compare with any in Europe in 
point of populousness." 

These speculations of Graunt and Petty, although curious from 
their originality, and frequently remarkable for their truth, were 
still far too unconnected and indefinite to form a correct basis for 
the operations of Life Assurance. A pamphlet was printed in 
1680, in which the whole doctrine of the value of life, then under- 
stood and acted on, as is affirmed; the utmost value allotted to 
the best life was seven years, at which the life of a " healthful 
man " at any age between twenty and forty was estimated ; while 
that of an aged or sickly person was from five to six years, — the 
various limits between these two extremes constituting the whole 
range of difference in value. Still they did much to call public 
and scientific attention to the question of life contingencies ; and 
it is more than probable that Dr. Halley, the Astronomer Royal 
of that day, was amongst the number whose attention was so 
drawn. It is certain that it was about this period that he com- 
menced a series of observations, which resulted in the publication, 
in 1693, of the Breslau Table of Mortality, and which in addition 
to rendering his own name immortal, was the first important step 
toward raising the Doctrine of Life Assurance to a position to 
claim rank amongst the sciences. 

It is not a little strange that while England was the theatre 
destined for the correct development of Life Assurance, she could 
not of herself furnish the data upon which its practice was to be 
built. The omission, before referred to, of leaving the ages un- 
recorded in the early parish registers of burials, caused Dr. Hal- 
ley to have recourse to the registers of the town of Breslau in 
Silesia, which was the only place where a record of the ages of 
the dead was kept. From the recorded ages in the Breslau reg- 
ister. Dr. Halley drew a table of the probabilities of the duration 
of human life at every age. In it he taught with great clearness 
and exactness the conditions needful for the formation of rates of 
mortality ; the manner of forming them with complete geometri- 
cal precision ; of deducing a corresponding table of the present 
state and annual movement of the population ; of reading in them 
the probability of survivorship of any person taken at random in 
a given society ; of, in truth, concluding upon the probable dura- 
tion of the co-existence of several individuals from the sole know- 
ledge of their age. He, also, first developed the true method of 
calculating Life Annuities, taking for his guide the rate of mor- 
tality during five successive years in Breslau.* 

It will not fail to strike the reader, as we proceed, as at least 
strange, if not altogether unaccountable, that the results of Hal- 

* Vide Assurance Magazine. 



22 " halley's TABLES," AND " THOMAS SIMPSON." 

ley's labors did not give some immediate impetus to the business 
of Life Contingencies. Such, however, certainly does not appear 
to have been the case. The publication of his Tables (in the 
Philosophical Transactions for the year 1693, No. 196), seems to 
have created as little attention in this country as did De Wit's 
Treatise on the continent, although there is great reason to believe 
the latter was purposely suppressed. Dr. Gouraud, in his His- 
tory of the Calculus of Probabilities, published in Paris in 1848, 
an able work, after speaking of De Wit and his works in terms of 
admiration, adds " and again, when in 1693 an English mathema- 
tician of the highest order, proceeding in turn to study, in the 
obituary returns of London and Breslau, the general laws of hu- 
man mortality, published on this subject a Memoir, which is read 
even to this day with admiration, absolutely no one took any 
heed of it. Useless instructions ! Buried in the 

vast and rich collection of memoirs of the Royal Society of Lon- 
don, the admirable labors of Halley were only to be discovered 
there by posterity." But so it was. 

How to account for this neglect is very difficult, particularly at 
a period when public curiosity had been excited by the failure of 
various annuity schemes,* and when one would therefore have 
supposed that anything which bore the semblance of truth would 
have been seized upon with avidity. Some writers have accounted 
for the fact by asserting that Halley's Tables being rather out- 
lines of what mortality Tables should be, than complete in them- 
selves, no one of that day fully comprehended their use. We think 
the more probable reason is, that, as these Tables were known to 
be based upon results chiefly obtained from abroad, they were not 
considered to be a correct guide to English mortality, and were 
therefore passed over for others less scientifically constructed at a 
later period. All who are acquainted with the Breslau Tables 
will, we think, agree with Mr. Hendriks, " that Dr. Halley was 
the discoverer and scientific arranger of what are termed Life 
Tables in the full and highly important modern acceptation of the 
term, and that in his paper (an estimate of the degrees of the 
mortality of mankind, <fcc.) he taught the world the best initia- 
tory and theoretical form for the computation of Life Annuities 
and of Survivorships, from and to given ages." We must, how- 
ever, proceed with our narrative. 

The next English writer on the subject of Life Contingencies 
was Thomas Simpson, " a natural and self-taught mathematician, 
whose life, prior to throwing himself on the world of London for 
support, had been somewhat of a vagrant one." He is reputed 
to have cast rustic nativities, told fortunes, advanced courtships, 
and occasionally "varied his vagabondism" by undertaking to 
raise the devil ; " an attempt in which he was so successful that 
he sent his pupil mad, and was obliged himself to leave the vil- 
lage." In 1740 he produced a volume "On the Nature and the 

* Vide Dr. Price's and Francis Daily's works on Annuities. 



" M. BUFF0N " AND " THOMAS WILSON." 23 

Laws of Chance," and in 1742 this was followed by his "Doc- 
trine of Annuities and Reversions, deduced from general and evi- 
dent principles," with Tables showing the value of joint and sin- 
gle lives. In 1752 he made an additional contribution to the sta- 
tistics of Annuities, as he published in his " Select Exercises " a 
supplement, wherein he gave new Tables of the values of annui- 
ties on two joint lives and on the survivor of two lives, more co- 
pious than hitherto. He first attempted to compute the value of 
joint lives ; but as these were still taken from the London bills of 
mortality they were by no means fit for general acceptance. He 
treated his subject, however, more broadly and clearly than it had 
been previously treated, giving some of the best Tables of the 
values of Life Annuities published during that period. Though 
the manner in which they might be computed had been shown by 
Dr. Halley, it is to the self-taught Simpson we are indebted for 
their practical application, as we shall presently see. 

Looking a little later we find, in 1760, M. Bufibn, the celebra- 
ted French naturalist, publishing " a further contribution to the 
statistics of Assurance, in a Table of the probabilities of life, esti- 
mated from the mortality bills of three parishes in Paris, and two 
country parishes in its neighborhood." The following are illustra- 
tions of his calculations : — " By this Table," he says, "we may bet 
1 to 1 that a new-born infant will live eight years ; that a child of 
one year old will live thirty -three years more ; that a child of two 
years old will live thirty-three years and five months more ; that 
a man of thirty will live twenty-eight years more ; that a man of 
forty will live twenty-two years longer, and so through the other 
ages." He adds " the age at which the longest life is to be ex- 
pected is 7, because we may lay an equal wager, or 1 to 1, that a 
child of that age will live forty-two years and three months longer. 
That at the age of twelve or thirteen we have lived a fourth part 
of our life, because we cannot reasonably expect to live thirty- 
eight or thirty-nine years longer ; that in like manner, at the age 
of twenty-eight or twenty-nine, we have lived one-half of our life, 
because we have but twenty-eight years more to live ; and lastly, 
that before fifty we have lived three-fourths of our lives, because 
we can live but for sixteen or seventeen years more." It is won- 
derful how nearly correct some of these estimates have since been 
found. 

It is particularly noticeable that nearly all those schemes which 
we now-a-days look upon and claim as resulting from the develop- 
ment of the science of Life Contingencies, were more or less anti- 
cipated by the early writers on the subject. Take the case of en- 
dowments for children — a good and wise provision in many cases 
— and we find the practice applied in a familiar manner, nearly 
two hundred years ago, in illustrating the practice of usury, — 
vide "A discourse upon Vswie, by waie of dialogue and orations, 
for the better varietie and more delight of all those that shall read 
this treatise, by Thomas Wilson, Doctor of the Civil Lawes, one 



24 PASCAL, DE WIT, AND OTHER CONTINENTAL WELTERS. 

of the Maisters of his Maiesties honourable Court of Requests. 
Imprinted at London by Roger Warde, dwelling neere Holbourne 
Conduit, at the sign of the Talbot. — 1584," wherein the writer 
says, "A merchant lendeth to a Corporation or Companie an hun- 
dred pound, which Corporation hath by statute a grant, that who- 
soever lendeth such a summe of money, and hath a childe of one 
yeere, shall have for his childe, if the same childe doe live till he 
be full h'fteene years of age, 500 li (£) of money ; but if the childe 
die before that time, the father to lose his principal for ever; 
whether is this merchant an usurer or no ? The law saith, if I 
lend purposely for gaine, notwithstanding the peril and hazard, 
I am an usurer." He then illustrates the other side of the ques- 
tion by an Annuity problem: "A Corporation taketh a 100 li. of 
a man, to give him 8 in the 100 li. during his life without restitu- 
tion of the principall. It is no usurie, for that here is no lending, 
but a sale for ever of so much rent for so much monie." In those 
days, when " usurie " was constituted a penal offence, such ques- 
tions were not unfrequently rising. 

Our remarks have hitherto been confined chiefly to English 
writers and mathematicians ; but the mere mention of the name 
of Buffon opens up associations of a brilliant array of continental 
writers — many of them contemporary with him — who have con- 
tributed in no small degree to the development of the science of 
Life probabilities. For the reader's further acquaintance with 
them we will refer him to one of the most excellent papers ever 
penned on such a subject, an article On the Origin and Progress 
of the Calculus of Probabilities, by Samuel Brown, the Actuary 
of the Guardian Assurance Company, in the sixth volume of the 
Assurance Magazine. 

We have spoken of Pascal and De Wit. With the name of the 
former is connected that of the Chevalier de Mere, by whom Pas- 
cal was furnished with a couple of problems for solution connected 
with the laws of chance in the throw of dice ; which solution was 
afterwards generalized by Fermat. A few years afterwards Huy- 
ghens, a celebrated mathematician, published a work in Dutch, 
containing several curious problems of a like nature. But as no 
immediate application was made of them to Life Contingencies, 
we must return to the grand pensionary De Wit. "In 1761," 
says Mr. Brown, " this great man, celebrated alike as a statesman 
and mathematician of the highest repute, who had already pub- 
lished, in 1650, a work on curves, to which Condorcet refers in 
terms of eulogy, conceived the design of applying the doctrine of 
probabilities to the valuation of human life in the question of 
Government Annuities. Collecting the registers of births and 
deaths in various towns in Holland, he used the results to esti- 
mate the true value of a Life Annuity, in the report which he pre- 
pared on the resolution of the States-General, passed 25th April, 
1671, to negociate funds on Life Annuities." This report, as we 
have said, has recently been brought to light by Mr. Hendriks, 



EARLY ORDINANCES PROHIBITING LIFE ASSURANCES. 25 

who remarks that "It is entitled to be considered as the first 
known production of any age, treating, in a formal manner, the 
valuation of Life Annuities." 

One of the earliest applications of the theory of probabilities to 
moral and judicial events was by ~N. Bernouilli, in 1709. Taking 
the rules already laid down by Huyghens, he proceeded to esti- 
mate, amongst other things, the time after which an absent person 
may be reputed to be dead ; the premium to be paid for assuring 
to a young girl a dowry or annuity on the day of her marriage ; 
the relative value of differing testimonies ; and the comparative 
chances of the guilt or innocence of an accused person. But 
what shall be said of a book, published a little later, by " John 
Craig," wherein he proposes to convince Jews, and to convert in- 
fidels by the aid of geometry and algebra ! 

The great work of this time, however, was undoubtedly the ars 
conjectandi of James Bernouilli, completed and published by his 
brother Nicholas — the N". Bernouilli of the previous paragraph — 
in 1713, after the death of the original author. "The views of 
James Bernouilli," says Mr. Brown, "were so original and pro- 
found that they took precedence of all writers of that period." 

Of the continental writers of this and more recent periods we 
must make particular mention of Remond de Montmort, Fa- 
ther Prestet, Leibnitz, Dupre" de Saint-Maur, Daniel Bernouilli, 
D'Alembert, Euler, Lagrange, Laplace, Condorcet, and by no 
means least, M. Quetelet, the Royal Astromoner of Belgium ; 
with others whom we shall have occasion to mention as we pro- 
ceed, — all throwing a charm over the science with which their 
names have become associated. To the English writers of this 
period we must add Wallis, Short, Morris, Bayes, and De 
Moivre. 

While glancing at the continental writers, it will not be inop- 
portune briefly to survey the progress of Life Assurance on the 
continent, more particularly as we may not have another oppor- 
tunity of doing so through these pages. Such a phalanx of wri- 
ters should betoken great results. But the facts are the other 
way. This has, to all appearance, arisen not so much from the 
less provident habits of the people in some of the continental 
countries, as from prejudice and direct legislative prohibition in 
many cases ! Thus in France an ordinance (called the Great 
Marine Ordinance) of the reign of Louis XIV., dated 1681, says 
" we forbid making of any Insurance on the life of men ;" although 
it afterwards gives a qualification : " nevertheless those who re- 
deem captives may have the price of the redemption assured upon 
the persons whom they withdraw from slavery, which the assur- 
ers are bound to pay, if the redeemed on his way back is retaken, 
killed, drowned, or if he perish by other means than natural 
death." In the Netherlands an ordinance of Philip the Second, 
dated 1570, is alike prohibiting. The Civil Statutes of Genoa, 
dated 1588, contain similar provisions, with a proviso against 



26 PROGRESS OF LIFE ASSURANCE LN" OTHER COUNTRIES. 

gambling insurances, as follows : "securities, bonds, and wagers, 
may not be made, without the license of the senate, upon the life 
of the Pope, nor upon the life of the Emperor, nor upon the life of 
Kings, Cardinals, Dukes, Princes, Bishops, nor upon the life of 
other lords or persons in constituted dignities, ecclesiastical or 
secular. Neither may they be made upon the acquisition, loss, or 
change of lordships, governments, kingdoms, provinces, duchies, 

cities, lands, or places Nor upon expected famine or 

war, or the contrary, &c." Such a statute speaks of speculation 
in days gone by. The 24th article of the Amsterdam ordinance of 
1598 recites, "We expressly prohibit insurance of the life of any 
person, and likewise wagers upon any voyage of frivolous pur- 
pose ; and where they are made we declare them void." The 
Rotterdam, ordinances of 1604 and 1635 repeat the latter injunc- 
tion. In France, the custom, if not the law, has become modified, 
and Assurance Companies have sprung up. The earliest of these 
were unfortunate, and this had the effect of making Life Assur- 
ance again unpopular there. There are now, we believe, ovky five 
French Life Companies of any note, viz., the Generate, Rationale, 
Union, Phoenix, and Caisse Paternelle, and these have all been es- 
tablished since 1819. A few years ago there were some five or six 
others, but they have all since voluntarily given up the business 
of Life Assurance, and put their affairs into liquidation. 

Mr. Hendriks estimated, a few years since,* that the whole 
sums assured in France, as payable at the death of persons, did 
not exceed one million ; the larger number of policies being for 
short term risks, or renewable only for a limited period. There 
are, however, some twenty millions assured by the associations of 
Tontinieres for deferred annuities and endowments payable in life- 
time ; and a large Fire business also is done — larger in proportion 
than in England — probably in some degree attributable to the 
fact of its being unfettered by restrictive duties ! How different 
the customs of neighboring countries ! In England the sums in- 
vested in Life Assurance probably stand as 10 to 1 against the 
suras invested in annuities. In France it is 20 to 1 the other way. 
Even up to a comparatively recent period the writers in France 
have not hesitated to speak in the most disparaging terms of Life 
Assurance. Thus, in a work of some note published at the close 
of the last century (1783), the writer says — " At Naples, Flor- 
ence, in England, and in other places, assurances on the lives of 
men are allowed to be made ; but this kind of assurances are not 
assurances properly so called • they are true wagers. These 
wagers, improperly called assurances, are prohibited in Holland 
and several other countries. For a long time they have been pro- 
hibited in France, and this prohibition has been renewed by the 
marine ordinance." Then he valiantly exclaims — " Man is beyond 
price ! The life of man is not an object of trade, and it is odious 
for his death to become matter for mercantile speculation ; and, 

* Vide Assurance Magazine. 



PE0GEESS OF LIFE ASSUEANCE IN - OTHEE COUNTEIES. 27 

as observes Grivel, these kind of wagers are of sad augury, and 
may occasion many crimes. Such assurances are, therefore, ab- 
solutely void. The premium stipulated is not even due !" Pre- 
vious writers had opposed Marine Insurance just as strenuously. 

It is but fair to add that the present Emperor (Napoleon III.), 
in addition to the many other social benefits he is conferring 
upon the French nation, appears most desirous of aiding in the 
spread of Life Assurance in his Empire. He has recently (1867) 
bestowed titles of dignity upon several persons who have been 
actively engaged in reforming the principle and extending the 
practice of Life and Casualty Insurance; and in a few years the 
fruits of his sagacity will be more apparent. Several new 
French Life Companies have recently been founded, and some of 
the English Companies are transacting a large Life business 
there. 

In Germany, Life Assurance is spreading rapidly, and the na- 
tive Companies are for the most part doing well. Many of the 
British Life Offices are now doing a large business in the north 
of Europe. In Australia both Life and Fire Businesses are 
rapidly extending ;* and in America, or more correctly speaking, 
the United States, the growth and development of sound Insur- 
ance Associations is so remarkable as almost to rival those on 
this side of the Atlantic, as the following figures will show : — In 
the year 1866, 37 offices issued 131,246 new policies, insuring 
42,047,616 dols. The average number of policies for each office 
being 3,547. The total amount assured by these offices is 
398,212,142 dols. The total assets are 89,565,480 dols., and the 
claims paid in 1866 were 6,140,553 dols. 

* Vide Assurance Magazine, Vols. ii. and iv. ; Mr. Hendriks' Papers, and Mr. Samuel 
Brown on the Progress of Life Assurance on the Continent. 



CHAPTER III. 

THE SUBJECT DIVIDED INTO DISTINCTIVE PERIODS. 

Having traced the progress of Life Assurance through the 
period of its early development, we have now to note its progres- 
sion during the period which has brought it into active practical 
application. The most intelligible way of doing this will be to 
mark the several epochs of progression under their characteristic 
heads. Thus, our First Division will commence in 1698, and ter- 
minate in 1760 ; it will be called the period of "Speculative As- 
surances." The next division will commence in 1762, and ter- 
minate in 1815; this will be called the "Transition Period." 
The Third Division will commence in 1816, and terminate in 
1844 ; this will be called "The Golden Age of Assurance Com- 
panies." The Fourth Division commences in 1844, and termi- 
nates with 1855 ; being called " The period of Bubble Companies." 
The Fifth period commences in 1857 and continues to the present 
time ; it is entitled, " Modern Assurance Companies." The rea- 
sons for these divisions of the subject, and the titles by which 
they are severally designated, will be more particularly set forth 
as we proceed. 

FIRST PERIOD— 1698 to 1760. 



Although the Amicable* Society is generally considered to 
have been the earliest English Office for granting Assurances, we 
have records of the existence of at least two schemes of a similar 
character prior to it, which deserve a passing notice. The first 
was projected by the Rev. William Assheton, D.D., Rector of 
Middleton in Lancashire, "for the benefit of the widows of clergy- 
men and others, and for settling of jointures and annuities." The 
design was undertaken by the Mercers' Company in London, 
which, in 1698, settled the sum of £2,888 per annum, as a secu- 
rity for the yearly payment of £30, during the life of any widow 
whose husband had, in his health, subscribed £100 to the fund, 
which was the limit allowed. Married men under 40 might not 
subscribe more than £500, or under 60 more than £300. The 
scheme, however, did not succeed. In 1699 another similar insti- 
tution was formed under the name of "The Society of Assurances 
for Widows and Orphans," which has, also, long since passed 
away.f Each of these Societies did a large business, and their 

* The Amicable is now about to pass out of existence as a separate office, arrangements 
having been made for its absorption by the Norwich Union Life Office to prevent its dying 
of inanition.— Note 1866. 

t Pocock. 



THE " LITTLE GOES ;" AND SQUIBS ON THE OFFICES. 29 

downfall may be traced to the existence of no correct data to 
guide them in their operations. 

A lapse of seven years from the last date brings us to The 
Amicable Society, or Perpetual Assurance, as it was then called, 
founded in 1706 ; and fourteen more years place upon the stage 
the Royal Exchange and London Assurance Corporation. The 
events attending the formation of these Companies will be more 
fully reviewed at the commencement of our next chapter. 

The periods intervening between the establishment of the 
Offices just named produced swarms of other Insurance schemes 
under almost every conceivable title. Thus, in the next year 
after the establishment of the Amicable, Charles Povey projected 
a Company to be formed in Hatton Garden, for four thousand 
healthy persons between the ages of 6 and 55, under the name of 
" The Proprietors of the Traders' Exchange House." Every sub- 
scriber was to pay 2s. 6d. per quarter, for which premium three 
hundred pounds were to be equally distributed to the nominees 
of the assured persons dying in any quarter, with one halfpenny 
from the clear profits of the printed papers sold by the Office ; 
about which more will be said presently. Soon afterwards we 
find this same Povey, who had rendered himself conspicuous as 
the author of a publication entitled " The unhappiness of England 
as to trade," projected the Sun Fire Office, and sold it to certain 
purchasers, who, under a settlement in April, 1710, constituted 
themselves into a Company. In addition to his endeavors to 
remove the evil consequences resulting from fires, he invented a 
machine to extinguish them, long known as " Povey's Fire Anni- 
hilator." About this period "The York Buildings Company" 
and " The English Copper Company" were also started ; and 
other Societies were formed " for the purpose of assuring the lives 
of particular classes of persons, as members of the army and 
navy, clergymen, schoolmasters, &c."* 

About this date, also, commenced a system of speculative assur- 
ances known as "the little goes." A number of persons com- 
bined, and each subscribed 5s. fortnightly, inclusive of policy 
stamps and entrance-money, on condition of £200 being paid to 
his heirs and executors. In another of these schemes 5s. a quar- 
ter entitled the subscriber's representatives to receive £120 on his 
demise ; while a third, called the " Fortunate" Office, was to pro- 
vide marriage portions of £200 for those who paid 2s. per quarter. 
One of these " little goes" was held at the Cross Keys, in Wych 
Street ; another called the " British Apollo," in Polls Court, 
Fleet Street ; and a third in Petticoat Lane. These were for the 
most part swindles, but a chronicler of the time says — " The suc- 
cess of these schemes sharpened the invention of the thrifty, and 
immediately almost every street in London abounded with Insu- 
rance Offices, where policies for infants, three months old, might 

* Pocock, p. 95. 



30 QUAINT SITUATIONS OF EAELY OFFICES. 

be obtained for short periods. From these they diverged into 
other ages, and various descriptions of persons." 

The number of Companies formed, and the variety of risks under- 
taken, afforded a prolific fund of amusement for the wits of the 
day. 

Thus we find one of them referring to Fire Companies : — 

Projecting, sure, must be a gainful trade, 
Since all the elements are bubbles made ; 
They're right that gull us with the dread oifire ! 
For fear makes greater fools than fond desire. 

And another hits at the Life Offices, professing to give the mor- 
tuary registers of the members. Thus : — 

" Died — Of a six-bar gate, 4 ; — of a quick-set hedge, 2 ; — broke his neck in 
robbing a hen-roost, 1 ; — surfeit of curds and cream, 2 ; — took cold sleeping at 
church, 11 ; — of October, 1 ; — Of fright in an exercise of the train-bands, 1." 

And a still later writer thus narrates his grievances : — 

" By Fire and Life Insurers next 
I'm intercepted, pester'd, vex'd 
Almost beyond endurance ; 
And though the schemes appear unsound, 
Their advocates are seldom found 
Deficient in assurance." 

New Monthly Magazine. 

At this period a custom existed with the Insurance Offices of 
printing historical or political papers, in the form of newspapers, 
which will explain a promise made by " The Proprietors of the 
Traders Exchange House" scheme, that every member was to 
have a halfpenny from the clear profits of the papers sold by the 
Office. Hatton, the old London Historian, speaking of the Union 
Fire Office, established in 1714, says, " every subscriber, desiring 
the same, may have one of the printed papers they publish once 
or twice a week gratis." A publication of the same kind was, 
also, issued by the Sun Fire Office, in 1724, called The Historical 
.Register, which was presented to the Insurers as a newspaper. 
It was continued until 1743, having been first published weekly, 
and then quarterly, when each register consisted of a thick octavo 
pamphlet, sold to the public at one shilling."* These publica- 
tions have proved a valuable addition to our historic literature, 
and were most likely conducted at a far less expense than many 
of the Offices now go to annually in advertising. 

A notable point of comparison between the Assurance Offices 
of this period and those of modern times, is the situations selected 
for carrying on business. The modern Offices rival each other 
in the splendor of their buildings, and the prominence of their 
situation. Whenever an eligible " corner" becomes vacant, the 

* Pocock, p. 96, 



SOiTE OP THE EARLY INSURANCE PROJECTS. 31 

Insurance Offices and the gin-palaces enter into fierce competition 
for its occupancy ; and the one that " comes down" most hand- 
somely gets it. Assurers, as they walk along the streets, may 
constantly see portions of their " bonuses" irretrievably invested 
in bricks and mortar. In the "good old times" the Sun took up 
its abode at the " back of the Royal Exchange.'''' The Royal 
Exchange Office did business against the Exchange, on Cornhill ; 
also "at the Rainbow Coffee-house, by the Inner Temple Gate, 
in Fleet Street." The great Equitable held its first meeting at 
the " White Lion in Cornhill." A Fire Insurance Company, with 
a capital of two millions, was held at the Three Tuns, Swithen's 
Alley; an Annuity Society at the Rainbow, Cornhill; another 
Fire Company at the Swan and Rummer ; an Assurance Office 
" for Horses dying natural deaths, stolen, or disabled," very pro- 
perly, at (the Crown Tavern,) Smithfield. Another Assurance 
Office " for all masters and mistresses against losses they shall 
sustain by servants, thefts, &c, 3000 shares at £1000," at the 
Devil Tavern ! and a " new Assurance Office upon the lives of 
men, women, and children," at the Bell and Dragon, otherwise 
called Lincoln's Inn Eating House, in Portugal Street, at Lin- 
coln's Inn Back gate !* , 

It was during the period of which we are speaking that most 
of the Companies referred to at the commencement of this Chap- 
ter were formed. David Macpherson, in his Annals of Com- 
merce, says, "Out of above two hundred visionary schemes that 
were formed and carried into effect at that time," only four ex- 
isted at the time he wrote, and two of those have since passed 
away. A little later, another historian tells us that " The Laud- 
able Society, the Amicable Society of Annuitants, the Provident 
Society, the London Annuity Society, the Equitable Society of 
Annuitants, the Westminster Union Society, the London Union 
Society, the Consolidated Union Society, the Public Annuitant 
Society, the Rational Society, the Friendly Society of Annuit- 
ants, and others, (whose names are now lost or forgotten,) were 
all established about the years 1770 and 1771." But that which 
strikes the historical reader as one of the most remarkable fea- 
tures of the times, is the purposes for which many of the so-called 
Assurance Offices, were got up. Here we find " A Mutual Assur- 
ance Company was formed to aid an adventurer with funds to 
raise a vessel which, laden with the treasures of the East, had 
been lost on her passage home ; the peculiar feature of the trans- 
action being that if any of the association should die before the 
object was accomplished, their share was to be transferred to the 
remaining adventurers." This made the hazard a double one. 
Another Company having at its head "three English peers, two 
Bishops, four Irish peers, with many eminent merchants and 
gentlemen" petitioned the king that it might be incorporated for 

* For numerous other similar examples see Pocock on Life Assurance, and Francis' An- 
nals of Life Assurance, &c. 



32 GAMBLING POLICIES OF THE LAST CENTURY. 

purchasing and improving forfeited and other estates in Great 
Britain, for granting Annuities, and for insuring lives ; seeing 
this will (were the words of the petition) unite by interest many 
of the King's subjects against the Pretender and his adherents 
for ever. In order to which several of the petitioners have sent 
persons into Scotland for purchasing the forfeited estates there, 
and have since by voluntary subscription to the Governor and 
Company of Undertakers for raising the Thames water in York 
Buildings raised a joint stock of £1,200,000 on the credit of 
which estates they propose to grant annuities for and to insure on 
lives ; for the benefit of such of his Majesty's subjects as are 
straitened in their fortunes by the reduction of interest." This 
scheme seems as unintelligible as it is voluminous. The further 
we look back the more daring and unaccountable are some of the 
schemes proposed. As early as the middle of the 17th century, 
Assurance Companies were resorted to for carrying into effect 
any ingenious or costly project, when all other means had failed. 
Thus, in 1643, one Captain John Buhner, an unsuccessful engi- 
neer, published a scheme entitled " Propositions in the Office of 
Assurance, London, for the blowing up of a boat and a man over 
London Bridge.'''' In this paper the projector covenants for him- 
self, his heirs, &c, to perform the undertaking within a month 
after intimating from the office he was ready, " so soon as the 
undertakers wagering against him 6 for 1," should have deposited 
enough to pay the expenses of making the boat and engine, he 
also subscribing his own proportion. The money so collected 
was to remain in the office until Captain Bulmer had either per- 
formed his contract, when he was to receive it all, or till he had 
failed, when it was to be repaid to the subscribers ; " and all 
those," adds the paper of propositions, " that will bring their 
monies into the office shall there be assured of their loss or gain, 
according to the conditions above mentioned. " # A hundred 
other schemes, equally absurd and unproductive of any good, 
were brought forward, some meeting with good success, while 
the new and respectable Companies made but slow progress ; 
" Onslow's Insurance," (as the Royal Exchange was called,) and 
" Chetwynd's Bubble," (the title given to the London^) being 
hawked in Change Alley, along with Companies for " importing 
jackasses" and u fatting hogs."f 

But the distinguishing feature of the age was the " Gambling" 
tendency of nearly all the Offices. Under the title of " Insurance 
Wagers" every conceivable description of speculation was entered 
into. On one day we find the Offices wagering £30 against £100 
that King William could not reduce the city of Namur before a 
given date. J The next, on the period of favor to be enjoyed by 
the mistresses of some foreign potentate. And the third day, on 

* Pocock, pp. 89, 90. 

+ Francis' Annals, p. 79. 

$ William III. was, at this time, carrying on a war with France. 



ACT AGAINST GAMBLING INSURANCES. 33 

the sex of the Chevalier D'Eon, whether he was a male, as he 
pretended to be, or a female as he was reputed to be * The du- 
ration of the lives of persons believed to be on their death-bed, 
was a common hazard; and the author of "Every Man his own 
Brother," was not far wrong when he said the dissolution of per- 
sons, who saw themselves insured in the public papers at 90 per 
cent., was not unlikely hastened by such announcements. 

Even the morality of the newspapers of that day was shocked 
by such proceedings: we find the London Chronicle of 1768 
thus declaiming : " The introduction and amazing progress of 
illicit gaming at Lloyd's Coffee-house is, among others, a power- 
ful and very melancholy proof of the degeneracy of the time. 
Though gaming in any degree is perverting the original and use- 
ful design of that Coffee-house, it may in some measure be excusable 
to speculate on the following subjects :— Mr. Wilkes being elected 
member for London ; which was done from 5 to 50 guineas per 
cent. ;— Mr. Wilkes being elected member for Middlesex, from 
20 to 70 guineas per cent.; — Alderman Bond's life for one year, 
now doing at 7 per cent. ;— On Sir J. H. [mark the modesty !] 
being turned out in one year, now doing at 12 guineas percent. ; 
— On John Wilkes' life for one year, now doing at five per cent.' 
N.B. — Warranted to remain in prison during that period ; — 
On a declaration of war with France or Spain in one year, 8 
guineas per cent. But," continues the sensitive journalist, " when 
policies come to be opened on two of the first peers in Britain 
losing their heads at 10s. 6d. per Lnt., or on the dissolution of 
the present parliament within one year, at 5 guineas per cent., 
which are now actually doing, and underwritten chiefly by Scots- 
men, at the above Coffee-house, it is surely high time to in- 
terfere." 

In the Public Advertiser of Dec. 6, 1771 (then the leading 
newspaper) we find the following paragraph :— " We have the 
pleasure to assure the public from the most undoubted authority 
that the repeated accounts of her Royal Highness the Princess 
Dowager of Wales being very ill, and her life in great danger, 
are entirely false ; such reports being only calculated to promote 
the shameful spirit of gambling by insurance on lives /" Con- 
trast this state of things with the Assurance contracts of modern 
date, and see how in this, as in other matters, the times have 
changed. 

The reason of the change may be best gathered by the perusal 
of the following clauses of an Act of Parliament passed in the 
14th year of George III., not very long after the period of which 
we have been speaking, which Act is generally known as the Act 
for the suppression of Gambling Insurances. 

™?,3 is extraordinar y personage, who had been acting in a diplomatic capacity in several 
™^" ' ,? nd who w. a s £or sometime in London as a minister plenipotentiary from France, 
was proved upon a trial held in the King's Bench, in an action to recover wages as to Ms sex, 
I^LIT™^^ 71 '- 11 ^ £ e ^seqjiently wore female attire for many years; yet, at 
5o, 1 hf^V^J i0nd0 + ^ ^ 1810 ' xt ^ s manife st, by the dissection of his body, and other un- 
doubted evidence, that he was of the male szx.—Biog. Diet. 



34 EARLY WRITERS ON INTEREST AND ARITHMETIC. 

It enacts that " no Insurance shall be made on the life of any 
person, or on any event whatsoever, where the person on whose 
account it shall be made shall have no interest, or by way of 
gaming or wagering; and that every such Insurance shall be null 
and void." Again, it shall not be lawful to make any policy on 
the life of any person, or on any other event, without inserting 
in the policy the name of the person interested therein, or for 
what use, or on whose account such policy is so made." Further, 
" where the insured has an interest in such life or event no 
greater sum shall be received from the insurer than the amount 
of the interest of the insured in such life or event.''' 1 Upon this 
last clause we shall have some remarks to make in another place. 
But thus ended, at one blow, the period of " Gambling In- 



It comes strictly within our scope (as will be hereafter seen) to 
notice the attention which, about this period, was beginning to be 
paid to the question of interest and arithmetic. Several most in- 
teresting works were written thereon, but we have only space to 
glance at their title-pages, and one or two of their other pecu- 
liarities. In 1693 was published a book called JPanarithmologia 
(before quoted) being 

I Mirror \ ( Merchants. 

t( . J Breviate ( f J Bankers. 

A *] Treasure f I0r \ Tradesmen. 

( Mate ) ( Mechanicks. 

And a Sure Guide for Purchasers, Sellers, or Mortgages of Land, Leases, An- 
nuities, Rents, Pensions, &c, in present Possession or Reversion, and a constant 
Concomitant fitted for all Men's occasions. Calculated and Published by W. 
Leybourn, 1693." 

The Author says : — 

" For the second part, which consists of simple interest and rebate, at several 
rates and times, they are already in every man's hands ; and for tables of 
compound interest at several rates and times (for one pound only) are no new- 
things. But the first that ever did take the pains to render them in such a 
form, as to resolve by them, all such questions as relate to anatocisme, on 
compound interest by addition and subtraction only ; without multiplication 
or division (as these will do) I account myself the only drudge, it being rather 
labour than art that brought it to what it is here rendered : and now, if any 
person shall object that the pounds, shillings, pence, and farthings will not 
answer in all cases (exactly) to what decimal fractions, to eight, nine, ten, or 
more places will afford ; I answer, it is true, and I know it as well as himself ; 
but this Enchiridon was not published for carping criticks, but for the use and 
benefit of honest dealers one with another ; and it is of sufficient exactness to 
perform whatsoever is promised by it ; and yet, that exactness (as may be 
acquired) is not omitted ; for if he pleases to advise with the latter part of 
the second Book hereof, in those particulars, he may there receive ample 
satisfaction to his expectation." 

Another book, published in 1728, has the following prolix 
title :— 

<f An Estimate of places for life, shewing how many years' purchase a place 



EARLY WRITERS ON INTEREST AND ARITHMETIC. 35 

for Life is worth ; liow long a man must hold his place to have the value, 
principal, and interest of the purchase-money: how much he has coming in 
per cent, per annum for his money ; what a place or life is worth, the income 
not exceeding ^1,000 per annum ; all at one view ; the whole being calculated 
upon the chances of the. probabilities of lives in general. To which is prefixed 
an account of places which are in the disposal of the Lord Mayor, Aldermen, 
and Common Council of the City of London, also of others more imme- 
diately belonging to the Crown ; being collected from the latest and best lists 
extant ; wherein is shown the nature and respective business of the principal 
officers, and in whose gift most of the said places are. The whole being 
interspersed with directions and instructions for obtaining places in general. 
By Richard Hayes, Teacher of Merchants' Accounts, in Great Eastcheap. 
Author of the new Method for Valuing Annuities upon Lives. London : 
Printed for W. Meadows, at the Angel, in Cornhill, M.DCC.XXVIII." 

Here is the author's apology for the publication of the book, 
which is not quite so long as the title : — 

" At the request of several gentlemen who were purchasers of my New 
Method for Valuing Annuities upon Lives, I have been prevailed upon to 
spend some more of my leisure hours in making the following estimate of 
places of life ; and finding upon observations that the purchasers of late have 
been allowed upwards of 9 per cent, for their money, I have, therefore, made 
my calculations at 9, 10, 11, and 12 per cent. Nor can I see why a purchaser 
should value his money at anything under the forementioned rates when he 
is buying of a place, if he considers that he is taking upon him an employ 
which may require labor and attendance to obtain the annual income such a 
place may be deemed to be worth ; and, indeed, when he has put such a value 
upon his money, there is but a small variance from the usual allowances by 
cathedrals and colleges to the purchasers of the leases of their estates for a 
certain term of years." 

We may pass over the morality which called for tables to 
estimate the value of places which the " Lord Mayor, Aldermen, 
and Common Council of the City of London " had to dispose of! 
As early, also, as 1608, a book was published in England by 
Richard Norton, from the Flemish of Stevinus, under the follow- 
ing title : — 

" Disme, the Art of Tenths ; or, Decimal Arithmetic : teaching how to 
perform all computations whatever by whole numbers without fractions, by 
the four principles of common arithmetic, namely, Addition, Subtraction, 
Multiplication, and Division ; invented by the excellent Mathematician, 
Simon Stevin." 

But this work probably bore no relation to Life Contingency 
calculations. Not so, however, with Clavis Usurce; or Key to 
Interest, by John Ward, which has been referred to by several 
writers, as a proof of the attention beginning to be paid to the 
subject. 



CHAPTER IV. 

SECOND PERIOD— 1762 to 1815. 
"transition period." 

The year 1762 ushered into existence the Equitable Society, 
and with it a new era in the practice of Life Assurance. Notwith- 
standing the brilliant array of names we have already seen asso- 
ciated with the development of the science, we cannot escape from 
the fact that the practice had hitherto been left to a blind-fold 
progression : that chance reigned supreme where all things should 
have heen fixed and certain: and that the improvements which 
from time to time crept in were rather the result of accident than 
design. If we want instances we need not travel far for them. 
Dr. Halley, as we have seen, had completed his Breslau Table of 
observations before the close of the 17th century: and, indeed, 
made great progress with his calculations of the value of Life 
Annuities at particular ages, yet, in a money act passed in 1694, 
a single life was estimated at seven years' purchase only, two 
lives at eight and a-half years', and three lives at ten years' pur- 
chase. In another act passed nine years later (1703) these values 
were but slightly revised, a single life being increased to nine 
years' purchase, two lives to eleven years', and three to twelve 
years' purchase. But at the same period, and still more unac- 
countably, the owner of a life annuity might change it for an 
annuity for ninety-nine years on payment of four and a-half years' 
extra purchase — making the entire consideration money only 
thirteen and a-half years' purchase. Or, putting it more intelli- 
gibly for the general reader, an annuity of £50 could then be se- 
cured for the period of ninety-nine years by paying down the 
sum of £675, while the Table now shows the value of such an 
annuity to be about £1,500, or considerably more than double. 
No difference in the rates of interest or value of money can recon- 
cile or explain away such discrepancies !* 

Again, we smile with astonishment at the high rates of pre- 
mium charged by the early offices, but it has been remarked — and 
the assertion may challenge contradiction— that for all that was 
then actually known those rates might as well have been too little 
by half, as they turned out to be too much by half! Five pounds 
was the premium originally demanded to assure £100 for one 

* In reference to the annuity schemes of this period, Dr. Farr says, " The Life Annuity 
at seven years' purchase was by far the best bargain ; for the interest of money being 6 per 
cent, the Life Annuity was worth, at Halley's estimate, thirteen years 1 purchase (13 - 4 at the 
age of ten) and an annuity for thirty-six years was worth only sixteen and three-quarter 
years' purchase. The value of a Life Annuity of £100 was £1,300, which was obtained for 
£714 ; and the new offer to such a purchaser was, if he would advance £450 more he should 
obtain an annuity worth £1,660 ; by accepting the offer he would have gained £496 on £1,164 ; 
~t>y rejecting it his profit was £586 on £714." 



the amicable: its constitution and restrictions. 37 

year, on a life of any age between twelve and forty-five ! On the 
25th day of November, 1721, the London Assurance Corporation 
granted" an assurance to Mr. Thomas Baldwin on the life of Nich- 
olas Browne for £100. In this case £5 5s. was the premium for 
twelve months, and this rate is known to have been continued for 
some time. The Amicable Office charged an entry fee of £3 15s. 
per cent, in addition to the £5 premium ; and middle-aged and 
old lives were frequently rejected even on these terms. Mr. Bab- 
bage endeavored to discover the circumstances which led to the 
fixing of 5 per cent, premiums, and came to the conclusion that it 
probably arose from its appearing that the annual number of 
deaths in London was nearly one in twenty of the population. But 
he naturally enough remarks that it must soon have occurred to 
any one who wished to have recourse to such transactions that 
the chance of a person aged twenty, dying within any given pe- 
riod, could not have been so great as that of a person of forty 
dying within the same period. 

In addition to the premiums named, extra rates were demanded 
for " youth hazard," " female hazard," and "occupation hazard:" 
while " officers on half-pay," and persons " licensed to retail beer," 
were charged no less than 11 per cent, extra. Nor did the Offices, 
with the exception of the Amicable, make any return of profits 
to the assurers, and in this Office the divisions took place with- 
out much regard to equity. The sum considered to be profit was 
divided every year amongst the policies which became claims dur- 
ing the year, quite irrespective of the time such policy had been in 
existence ; and the Society had no power of applying any portion 
of such profits for the benefit of the assurer during his lifetime. 
Such was the position of assurance business just prior to the time 
we are now entering upon. Need we wonder that Life Assurance 
was slow in becoming popular? 

It is, we have no doubt, perfectly true that the Offices acted up 
to the principles of their constitution ; but if this be admitted it 
only rivets us to the fact that the practice had by no means kept 
pace with the science. That the Offices established prior to the 
Equitable paid very little regard to the cultivation of Life busi- 
ness we have abundant proof. Professor de Morgan has remarked 
of the Amicable that it was • • originally founded rather on prin- 
ciples of mutual benevolence than of mutual assurance, as now 
understood." And the account which the managers of the Soci- 
ety gave of its constitution, when opposing some new schemes in 
1720, coincides with this view. They affirmed that they were 
a Corporation created by letters patent, 5 Annce Beginm, which 
did constitute a number of persons, not exceeding 2,000, to be a 
body politic, with power to purchase lands not exceeding the 
yearly value of £2,000 ; and to raise a joint-stock for the use and 
relief of widows and orphans, in the manner and under the regu- 
lations therein mentioned. And that the members of the Corpo- 
ration did begin to act under their said charter in the year 1 706, 



38 SOUND ARGUMENTS FOR LIFE ASSURANCE. 

and had continued to act ever since; had admitted members, 
granted policies on lives, and improved their joint-stock at interest 
on Government securities and otherwise, which then amounted to 
£50,000 or thereabouts : and that they had made annual divi- 
detids to the claimants of the members who had died in each year, 
according to the directions of the charter. That in the year 1710, 
and ever since, they had divided £10,000 per annum amongst the 
claimants ; and what appeared most important for their present 
purpose, in the year 1707 or 1708, several persons endeavored 
to get another charter for insurance on lives, but that the same 
was stopped at the Great Seal, on hearing counsel for the said 
Amicable Society, for a perpetual Insurance office.* 

The Royal Exchange and London Assurance Corporation 
were established next after the Amicable / and they were the 
first Offices that issued life policies for fixed sums payable at 
death : the latter Office issued its first life policy on the 7th June, 
1721. Yet, strange as it may appear, in the charter obtained by 
these Companies in 1720, not a single word was said on the sub- 
ject of Life Assurance, nor in the preliminary Act of Parliament 
passed in the previous year — an Act " for the better securing 
certain powers and privileges intended to be granted by his Ma- 
jesty by two charters for assurance of ships and merchandise, and 
for lending money upon bottomry • and for restraining several ex- 
travagant and unwarrantable practices therein mentioned." This 
was the Act passed by " the most dutiful Commons " on an occa- 
sion we have already noted. But within twelve months from the 
period the original charter was obtained these corporations were 
again before the "House." Fortune had not smiled favorably 
upon them. They had invested some portion — some considerable 
portion it has been said — of their funds in the " South-sea " pro- 
ject, and the bubble had burst. They were, therefore, unable to 
perform, in full, the pecuniary engagements under which their 
charter had been secured ; and they sought, and obtained, from 
Parliament some modification of these conditions. 

It was under their amended or modified charter that these 
Companies obtained powers for assurance of lives. What had so 
suddenly moved them to take up this branch of business it is 
difficult to say ; unless the following circumstance should offer 
any solution. Just previous to this date, a petition had been pre- 
sented to Parliament, signed by Sir James Hallett, and 113 other 
merchants, &c, subscribers to a " Fund of £1,200,000 for granting 
annuities, securing fortunes to widows, orphans, and others ; set- 
tling jointures on marriages, and insuring of lives, &c." The peti- 
tion first spoke of the advantages of annuities ; and then proceeded 
to point out the advantages of Life Assurance in a manner so in- 
telligible and understandable that it would put to shame half the 
high-flown, but empty prospectuses of the present day. It averred 

* Vide Mr. Hendriks' papers, Assurance Magazine, vol. iv. 



STATE OF LIFE ASSURANCE BUSINESS AT THIS PERIOD. 39 

that it would be of great advantage to the subjects of these realms, 
" especially such of them as are in trade, to use in such their trade 
the greatest part of the fortunes they may receive with their 
wives ; and which they might much the better do, could they, by 
laying out some part of the said fortunes, receive a sufficient com- 
petency for their wives to live and subsist upon, in case they 
should, by the chance and hazard of trade, either fail or die, 
without a capacity to make any other provision for them." Fur- 
ther, 4: that it would also be very serviceable to his Majesty's sub- 
jects could they safely and securely insure upon their lives ; which 
would encourage merchants to be more bold in their undertakings, 
because in case of their death before their schemes in trade suc- 
ceed, their widows and families might thereby receive a benefit 
in a great measure to recompense the failure of such their under- 
takings. That persons in good offices and employments for life 
may, for the same reason, be induced to make provision for their 
families, who during their lives have an opportunity of maintain- 
ing them in good credit, but at their death very often leave them 
in slender circumstances." 

These arguments might be multiplied, but they could not be 
much improved upon. The Attorney-General, however, in his 
wisdom, reported to the Government, or the King, on this — Hal- 
lett's Insurance scheme — that in his opinion it was not advisable 
for his Majesty to erect " any such corporation as is therein de- 
scribed," and the matter, so far as the then promoters were con- 
cerned, fell to the ground. 

Whether it was this project or not that turned the attention of 
the Royal Exchange and London Assurance Corporation to Life 
Assurance, we have now no means of knowing. But we have the 
most undoubted proof, that while the business in their Marine 
and Fire departments was considerable, the Life business of at 
least one of them — the Royal Exchange — was most exceedingly 
small. How we know this the reader shall learn. When the 
promoters of the Equitable, forty years later, were applying for a 
charter, the Royal Exchange Company opposed them, taking up 
the ground of the small prospect of success • stating in confirma- 
tion that they had only received for Life Assurance premiums 
during the period named (forty years) the sum of £10,915 2s. 2d. ! 
and even these, Mr. Hendriks assures us, were for what are termed 
short-period risks, insured against for generally a year or lesser 
period. " Taking this element into account," he continues, " the 
above receipt of premium shows that the gross sum insured on 
the average of years was not more than £5,000 per annum or 
thereabout, being half the amount which Life Companies have 
now been for many years in the habit of insuring on a single 
life. There is (he adds) no ground for assuming that the busi- 
ness of the other Corporation was more extensive ; in fact, al- 
though there were at this period several Associations in activity 
for the grant of insurances of survivorship annuities for widows, 



40 FAVORABLE ORIGIN OF THE 

and of deferred annuities for old age ; and the history of which 
Associations, their quarrels, competitions, and downfall, may be 
seen in the writings of Dale, Dr. Price, and others ; nevertheless, 
there is no doubt that the insurance of a sum payable at deaths 
was, at the time we are referring to, a contract very rarely en- 
tered upon, either by the commercial or other classes of the com- 
munity"* 

This, we think, brings us very clearly to understand the posi- 
tion of Life Assurance, properly so called, at the commencement 
of the period we have now entered upon. The confidence of the 
public had already been shaken (as we have seen) by numerous 
failures in annuity projects. The rates of premium demanded 
were exorbitant. The Companies of this period could not show 
that they had adopted any more I'eliable data for their guidance 
than their predecessors. The Legislature showed no disposition 
to encourage such Associations ; and the only Society which at 
all laid itself out for the business — the Amicable — was so crippled 
by its constitution, or the provisions of its charter, as to be unable 
to grant assurances of the class which were then beginning to be 
most sought after. It has struck us with surprise that no earlier 
writer than Mr. Hendriks had pointed out the fact that the 
Amicable Corporation was not invested with the power of grant- 
ing assurances at rates of premium calculated according to age 
until after 30th October, 1807; and it is only as recently as the 
8th May, 1845, that it was empowered to grant assurances for 
fixed sums. The former of these powers was obtained by the 
fourth of its six charters, 48 Geo. III. ; the latter by the 8 Vic, 
c. viii. 

We can the more readily now understand how it was that 
when the before-named Thomas Simpson — the self-taught mathe- 
matician and astrologer — having raised himself to considerable 
literary fame by his various publications — delivered a course of 
lectures in London, in which he (availing himself of Dr. Halley's 
suggestions) announced the possibility of constructing a table of 
premiums graduated according to the age of the assurer, consi- 
derable public attention was excited. And that when the sug- 
gestions of Simpson had been investigated, and a graduated 
Table of Premiums actually computed by Mr. James Dodson, on 
the plan laid down by Dr. Halley, the time had arrived for the 
foundation of a Society which should more completely answer 
the requirements of the age than any one that had preceded it. 
And the Society which sprung out of this combination of favor- 
able circumstances is that which we now speak of as the Old 
Equitable — its original title being " The Equitable Society for 
the Assurance of Life and Survivorship." 

Of course we all feel anxious for a glimpse at those mysterious 
figures — the first result of Halley's labors, Simpson's science, and 
Dodson's computation — and we have them at hand, merely pre- 

* Assurance Magazine, vol. iv., page 308. 



PETITIONING FOR A CHARTER. 41 

mising, in the words of the late actuary, Mr. Morgan, that they, 
" in order to secure the stability of the Institution, had chosen a 
Table of observations, in which the probabilities of Life were so 
low, that the premiums of assurance derived from it were nearly 
twice as high as those which are required at present." A fact 
most apparent from the figures themselves : — 



At the age 


of 


Whole Term Premiums for Males. 


For Females 


14 




^2 17 


... J3 311 


20 




3 9 4 


3 14 3 


25 




3 14 


4 15 


30 




3 18 7 


4 4 4 


40 




4 17 9 


5 4 8 


49 




6 2 5 


6 11 



It will be remarked that contrary to modern usage — which, in- 
deed, in some few cases has gone to the exactly opposite extreme 
— higher rates were charged for female than male lives : and 
whatever theory may say to the contrary, practice has confirmed 
the wisdom of such a course: for hitherto female assured life has 
been (speaking in the language of actuaries) of far less value 
than male assured life! Nor were these pioneer actuaries wrong 
in putting a heavy extra percentage on retailers of beer! as 
witness some of the more recent reports of the Registrar-General.* 

The founders of the Equitable were naturally anxious that it 
should enjoy equal legislative privileges with its predecessors. 
Accordingly, in 1761, a petition was presented to Parliament 
from the Hon. Coote Molesworth, of Chichester, Doctor in Physic 
and Fellow of the Royal Society; Sir Richard Glynn, Knight 
Baronet and Alderman of London ; Thomas Pickering, of Lon- 
don, D.D.; John Silvester, of London, M.D. and F.R.S., "and 
seventy-eight others, in behalf of themselves and many others, 
his Majesty's most dutiful and loyal subjects." The said petition 
sets forth, " That great numbers of H.M.'s subjects whose sub- 
sistence principally depends on the salaries, stipends, and other 
incomes payable to them during their natural lives, or on the 
profits arising from their several trades, occupations, labor, and 
industry, are very desirous of entering into a Society for assuring 
the lives of each other, in order to extend, after their decease, 
the benefit of their present incomes to their families and relations, 
who may otherwise be reduced to extreme poverty and distress 
by the premature death of their several husbands, fathers, and 
friends, which humane intention the petitioners humbly appre- 
hend cannot be effectually carried into execution without H.M.'s 
Royal authority to incorporate them for that purpose." 

To effect their " humane intention" the petitioners laid down a 
certain plan of operation ; and concluded their petition in this 
wise, "That establishment, by H.M.'s Royal charter, of a free and 
open Office of Insurance upon the plan aforesaid will, as the peti- 
tioners with great submission apprehend, be more equitable than 

* See subsequently, page 78. 



42 HOW THEY DID NOT GET IT. 

any hitherto proposed as being calculated for the sole benefit of 
the persons assured, a method not hitherto practised, and will, as 
the petitioners humbly hope, in a variety of instances, prevent 
the before-mentioned inconveniences, and be productive of the 
greatest advantages to the public. That there is at present sub- 
sisting but one Corporation for the assurance of lives on the 
mutual plan, viz., the Amicable, (the Royal Exchange, and Lon- 
don Assurance, being proprietary) which, as the petitioners hum- 
bly apprehend, acts upon so circumscribed and narrow a plan, 
that very few of H.M.'s subjects do receive any benefit from it, 
in comparison with the great number to whom the benefit of 
such an insurance might be extended." 

Now this petition, according to the custom in such cases, was 
referred to the Attorney and Solicitor-General for the time being ; 
and their report thereon is one of the most amusing documents 
connected with the history of Life Assurance. These learned 
gentlemen remark that " 1st, the petitioners propose to insure 
upon cheap terms (/), and for a longer time than is practised at 
present in any Offices ; to which end they have specified the 
rates at which the assurance is to be done ;" and " 2nd, they pro- 
pose to raise a capital by investing the premiums, together with 
a small additional sum of 40s. to be deposited by every person 
insured to answer all losses ; and by way of further security, to 
oblige every person insured to become a member of the Corpora- 
tion, and to declare a covenant that he will bear his propor- 
tion upon any call if the premium and deposits should be defi- 
cient." 

The said Attorney and Solicitor-General having considered the 
foregoing proposals, and also heard counsel in support of the pe- 
tition, and against it, on behalf of the London and Royal Ex- 
change Assurance Companies, and also on behalf of the " Cor- 
poration of the Amicable Society for the perpetual assurance of 
lives, in Serjeant's Inn," all of which did their best to oppose the 
formation of this office ; then proceed to deliver their opinions, in 
which may be found some very wholesome conclusions, although 
it is clear that they were not learned either in the theory or prac- 
tice of Life Assurance : and it is more than probable that the 
counsel for the opposing Companies had not done much to 
brighten their understandings. They were " humbly of opinion 
to advise H. M. not to comply with the prayer of the said peti- 
tion for the following reasons: — 

" 1st. Because it appears to us altogether uncertain whether this project 
will or can succeed in the manner in which it is proposed, and if the success 
is uncertain, the fund for supporting it, which is to arise from the profits of 
the undertaking, will be precarious. This last objection is, in our opinion, a 
fatal objection to the scheme; for, though an undertaking plainly calculated 
for the benefit of the public may, in some instances, deserve encouragement, 
even tohere success is dubious, yet, in such cases, the projectors alone ought gene- 
rally to abide the peril of the miscarriage. In the present proposal, therefore, 
whatever else may be hazardous, the capital or fund to answer the losses 



WHY THEY DID NOT GET IT. 43 

ought to be certain and liable to no casualty, for which reason, when the 
legislature enabled H. M. to erect the two Corporations of the Royal Ex- 
change, and the London Assurance, they thought it necessary to oblige these 
bodies, in the first place, to raise a large capital before they began to insure. 
The success (they continue) of this scheme must depend upon the truth of 
certain calculations taken upon Tables of life and death, whereby the chance 
of mortality is attempted to be reduced to a certain standard ; this is a mere 
speculation, never yet tried in practice, and, consequently, subject, like all other 
experiments, to various chances in the execution. The Tables upon which the 
calculations are built are the Bills of Mortality of London and the Breslau 
Tables ; and admitting them to be strictly accurate (of which there is strong 
reason to believe the contrary) they are compounded of diseased as well as 
healthy persons, of those who are embarked in dangerous as well as other 
employments, without pointing out the proportions they bear to each other, 
and yet, as the petitioners propose to insure only such even of the healthy as 
are not employed in dangerous occupations, the register of life and death ought 
to be confined, if possible, for the sake of exactness, to such persons only as are 
the objects of insurance, whereas the calculations offered embrace the chances 
of life in general, the healthy as well as unhealthy parts thereof, which, 
together with the nature of such persons' occupations, are unknown numbers. 
"As the fund to answer losses (they continue) must depend principally 
upon the premiums (for we pay but little regard to the small deposits on the 
personal covenant) the project should be sure of success, otherwise the adven- 
turers will be undone or greatly injured, and the project will fall the heavier 
because it will fall principally upon the poorest sort — the rich having no 
temptation to assure. Under these circumstances if there were no other objec- 
tion against the scheme proposed, the uncertainty of success would make us 
fearful of advising the charter." 

But perhaps the most curious passage in the report is the fol- 
lowing : "We are the more apt to doubt of the event, because it 
has been represented to us by the affidavit of Mr. Savage, that 
all profit which has been received by the Royal Exchange Assu- 
rance Office, from the time of its commencement to the present 
time (40 years) amounts only to a sum of £2,651 4s. 6d., the dif- 
ference between £10,915 2s. 2d. paid in premiums, and the sum 
of £8,263 17s. 8d. disbursed in losses,* which small profit must 
have been near exhausted in the charges of management. If 
then, this Corporation, who are charged with taking unreasonable 
premiums, have reaped no greater profit, we can hardly expect a 
more considerable capital to arise from lower premiums, and the 
hazard of loss will be increased in proportion as the dealing will 
be more extensive." If these two legal personages could only 
now behold this great Society, with its eight millions of surplus 
capital, for the most part accumulated under a lower scale of 
rates than those originally proposed to be adopted, their surprise 
would be unbounded ! But we now arrive at the second series 
of objections : — 

" 2nd. The Crown has very wisely been always cautious of incorporating 
traders, because such bodies will either grow too great, and by overwhelming 
individuals become monopolies ; or else by failing will involve thousands in 
the ruin attendant upon a corporate bankruptcy. And they continue : As trade 
seldom requires the aid of such combinations, but thrives better when left 
open to the free speculation of private men, such measures are only expedient 

* These are figures referred to at pege 39. 



44 WHY THEY DID NOT GET IT. 

where the trade is impracticable upon any other than a Joint Stock, as was 
thought to be the case in the East India, South Sea, Hudson's Bay, Herring 
Fishery, and in some other Companies erected upon that principle ; but there 
does not appear to be any such necessity in the present case, because the 
business of insuring lives is carried on, not only by the two great Companies 
already mentioned, but such policies are duly underwritten by numbers of pri- 
vate men, and we think that if the profit were so enormous as the petitioners 
have endeavored to represent upon the terms now, and for many years, prac- 
tised in the City of London, there would not ham been wanting enterprising 
persons to have reduced the premiums, and drawn this branch of dealing to 
themselves, by underselling the market. If the petitioners then are so sure 
of success, there is an easy method of making the experiment by entering 
into a voluntary partnership, of which there are several instances in this 
business of insuring ; and if upon such a trial these calculations are found to 
stand the test of practical experiment, the petitioners will then apply with a 
much better grace for a charter than they can at present, whilst the scheme is 
built only upon speculative calculations." 

This course was acted upon ; and we are now brought to the 
third series of objections, which, though last, we venture to think 
were by no means least in their significance : — 

" 3rd. The Parliament, in erecting the two great Companies already men- 
tioned, have already declared their opinion that such charters ought not to 
be granted without some benefit accruing to the public, and were not sure, 
when they passed the Act, whether they were not erecting a nuisance ; to 
prevent which, a power was reserved to the Crown to abolish the Corporation 
at any time within the term of 31 years, if they should be found upon trial to 
be mischievous or inconvenient ; and we cannot help observing, that except 
only in the case of the Amicable Society of Serjeant's Inn, and which is 
formed upon a very narrow bottom, the Crown has never of itself, as far as it 
appeared to us, granted such a charter as the present in any case whatsoever : 
and as the two great Companies paid a very large sum to the public for the 
privileges of their charter, we cannot advise the Crown to entrench upon 
their rights on the bare request of any set of men without a clearer and more 
certain prospect of public good" 

And so the petition was dismissed, although " C. Pratt " and 
" C. Yorke " — the Attorney and Solicitor-General, were fully per- 
suaded that those worthy gentlemen who had made this applica- 
tion were really convinced that the scheme would prove advan- 
tageous to the public as well as themselves." 

But the promoters were not dismayed. They saw the scheme 
was practicable, and resolved to carry it out. Starting upon 
mutual principles, they were better prepared to dispense with 
Parliamentary powers than Companies requiring large paid-up 
capital. They drew out the constitution of the Society, in the 
form of a Deed of Settlement ; and four years afterwards, viz., in 
1765 — Hilary Term, 5 Geo. III., — this Deed was duly enrolled in 
the Court of King's Bench. The time which had elapsed had 
not been misspent. The rates and other features of the Society 
had been re-considered and in many instances improved upon. 
Accordingly the example of rates already given were not those 
included in the Deed. In some cases a considerable reduction 
had been made ; but here are the amended figures, and beside 
them, the rates now charged by the Society at the same ages : — 



14 
20 
30 
40 
50 
60 
67 



THE "EQUITABLE;" NORTHAMPTON TABLE, AND DR. PRICE. 45 

To Assure £100 for one year. At Death. Present rates for £100 at Death. 

£1 17 7 

2 3 7 

2 13 4 

3 7 11 

4 10 10 
6 7 4 
8 12 1 



illO 6 


. i2 4 10 


1 11 9 


2 7 7 


1 15 6 


2 15 4 


2 4 6 


3 12 8 


3 2 


4 12 2 


4 4 8 


5 18 4 


6 4 10 


8 5 2 


7 18 1 


. 11 18 8 



In each case there was a proviso against hazardous occupation ; 
and for each girl or woman under 50, an addition was to be made 
to these rates. 

We may take it on the authority of Mr. Hendriks, as estab- 
lished, " that no plan of Life Insurance, in its proper form of 
development as an assured provision of a fixed minimum amount 
of money payable at death, whenever that may occur, — the risk 
thus extending from the date of the Insurance being effected, up 
to the expiration of the whole term of life, — had been contem- 
plated by a Company or Society, or had been considered by any 
Legislature in Europe, prior to the year 1760, when discussions 
ensued in England preliminary to the formation of the Equitable 
Society in 1762." But another consideration presents itself. 
The graduated scale of premiums prepared by Dodson required 
confirmation, either by corresponding results deduced from dis- 
tinct data, or by some process of testing the soundness of the 
Society as it progressed in age and magnitude ; for, as Mr. 
Morgan has well observed, in one of his eloquent addresses, 
what signify premiums, however correctly computed, "if no 
means are provided for ascertaining, at proper intervals, the real 
state of the Institution, and for disposing of its profits without 
endangering its security, either by a direct or an indirect inva- 
sion of its capital ?" Happily both these means of confirmation 
were at hand. 

Dr. Price, " an unsuccessful Unitarian preacher, and the con- 
tributor of many rare papers to the Philosophical Transactions," 
had, amongst other things, turned his attention to the subject of 
Life Contingencies. For a long time he sought, in vain, for data 
on which to base his inquiries, but at length he found in the 
registers of the town of Northampton, such a record of births 
and deaths as he considered would form a fair average of such 
events throughout the kingdom — and from these he constructed 
the far-famed Northampton Mortality Tables. His book was 
published in 1780, and for the first time the Life Offices had before 
them what might then be fairly conceived to be a true guide to 
the expectation and duration of life in this country. But several 
years before the Northampton Table was completed and pub- 
lished, Dr. Price, who had often been consulted on points of 
difficulty by the promoters of the Equitable Society, had com- 
municated to them two plans to be employed under their exist- 
ing rates — one for ascertaining at certain periods the amount of 



46 " EQUITABLE RATES AND BONUSES, AND NEW COMPANIES. 

the surplus stock ; and the other for determining, with a con- 
siderable degree of accuracy, the state of the Society's accounts 
each year ; and so admirably were they found to answer these 
purposes, that they have been continued in use by this Society 
ever since, and with certain modifications by nearly all the old 
Societies in the Kingdom. All honor then to the memory of Dr. 
Price ! 

It has been frequently said, that the history of the Equitable 
Office is the history of Life Assurance in England. If this be 
not literally true, it certainly is true that the readiness with 
which the conductors of this Office have ever listened to and 
embraced all real improvements, not only led it to the high 
position which it so speedily attained, but has tended greatly to 
advance both the theory and practice of Life Assurance in this 
kingdom. Within one year after the publication of Dr. Price's 
work, he had prepared for this Society an entirely new set of 
Tables, embracing upwards of 20,000 calculations. The rates so 
calculated, although only based upon an assumed improvement of 
money at 3 per cent, interest, were so far below the premiums 
before in use, that 15 per cent, was added to them, to prevent 
too sudden a reduction in the annual income of the Company ! 
In 1782 the new rates were put into practice, and we may, we 
think properly, mark that year as opening an new era in English 
Life Assurance : hence we have named this the " transition 
period" — the transition being from a state of doubt, mistrust, 
and uncertainty, to a condition of certainty based upon scientific 
truth, and a state of confidence arising from well-merited success. 

The effect of the new rates upon the Equitable Office was, even 
after the extra loading to which they had been subjected, to 
diminish the income some four thousand pounds in the first year. 
For whereas in the ordinary course of things the income would 
have been £36,000, it was only £32,000. This brought about 
some little adjustment, for " to compensate the then members 
for having previously contributed too much to the Society, an 
addition was made of 30s. to every £100, in respect of every pay- 
ment made prior to January, 1782." To show, however, that the 
new rates did not at all impoverish the funds of the Society, we 
may note that at the time of the change the whole surplus fund 
only amounted to £30,000. In 1786 an investigation of the sur- 
plus took place, and the 15 per cent, increase to the rates was 
taken off. In 1789 a further increase was made to the sums 
assured at the rate of £1 upon each £100 for every annual pay- 
ment of premium made prior to 1786 ; and before the close of the 
century there was another similar addition. Even after this ope- 
ration, the surplus fund was £110,000 ; and every person assured 
previously to 1772, had 30 per cent, added to the original sum 
mentioned in his policy ! 

When it came to be seen what large surpluses even the reduced 
rates of premium would leave, in favor of the Offices, it was not 



COMPETITION AND TROUBLES IN FORMER TIMES. 47 

much to be wondered at that a number of new Societies should 
spring into existence, any more than that most of them should be 
proprietary Companies. A glance at our Chronological Table 
will show that of the present existing Assurance Offices estab- 
lished during the period of which we are speaking, but three of 
them (including the Equitable) were originally mutual, although 
another has since become so. The business was seen to be a 
good one, for, with the then rates of premium, the profits were 
large. A Pelican and an Eagle came down to the spoil. Even 
the great Globe began to stir, and Albion and Atlas came on, 
with the Sun at their heels. From Westminster to the West of 
England the mania spread. London Life was followed by the 
Norwich Union, and another Union was near. The Provident 
well nigh split upon a Rock ; and the climax of the period was 
a splendid Scottish Widows' 1 Fund ! These were days of com- 
petition with a vengeance. Two Companies — the Royal Ex- 
change and the London Assurance Corporation — offer the Gov- 
ernment £600,000 for Charters giving them the exclusive right* 
of insuring ships and. merchandize, and actually pay £150,000 
each for the privilege. They oppose the application of the Globe 
for a Charter. The Globe pleads the necessity of competition, 
and offers the Government £100,000. The money very nearly 
carries the point ; but unexpected difficulties spring up. The 
Amicable employ counsel to oppose the formation of the " Com- 
pany of Undertakers," calling them a " Company of upstarts ;" 
the " upstarts" in reply calling the Amicable " old and supine." 
The Union Life Office was held forward as being marked by 
" superior liberalitjr," and having (oh, virtuous Office !) " a de- 
cided contempt of the petty advantages which swell the profits of 
other Offices !" The Provincial Union offered to take lives at 10 
per cent, under the other offices, while another Company, with 
" extra superior liberality," would take them at 20 per cent, less ! 
Why then should we complain of the milk-and-water competition 
of modern times, confined as it is to " new features," and " mon- 
ster advertisements !" 

But in addition to all this competition amongst themselves, 
the early Assurance Companies had to combat with enemies of 
another class. The success of some of the Offices had caused 
them to be a little reckless with their funds, and also a little care- 
less of the persons to whom they granted policies. Evils were 
thus brought about. To the first cause, perhaps, may be attri- 
buted that " insolent attempt," as it has been designated, made 
by the Government in 1765, to abstract from the Life Offices what 
was called the " Unclaimed property," being in fact their surplus 
funds. "The peace, concluded in 1763, followed a war which 
cost upwards of a hundred millions, and the bribery which was 
necessary to carry the treaty through the House had contributed 

* This exclusive right was only against other corporations, and not against individual 
assurers, who in those days were numerous. 



48 INSURANCE " SWINDLES AND THE " GOLDEN AGE.'* 

to exhaust the Treasury. Money was to be acquired, and the 
people grumbled at the taxation necessary to raise it. In this 
dilemma it suddenly occurred to the ministers that there might be 
unclaimed property in the Assurance Offices, and by some con- 
fusion of right and wrong, it was thought just to claim this 
private property for the public good.'''' "Nothing," continues our 
historian, " could more decidedly approach confiscation. But in 
dealing with these Offices the Government was dealing with a 
large and influential body of proprietors, whose gains were aided 
by this ' dead cash,' and who were not men to see their purses 
invaded with impunity," and so, happily, the intended blow was 
averted. To the latter cause — want of caution with whom they 
did business — perhaps, we may attribute that series of frauds 
which blot the pages of Assurance History towards the close of 
the 18th century. 

Turning to Mr. Francis' Annals, as we do wherever the " ro- 
mance" of Life Assurance is to be touched upon, and glancing 
rapidly over the pages of this period, we find recorded how a 
man named Innes, having insured the life of his step-daughter in 
the Equitable Olfice, and having forged a will for the purpose of 
defrauding the Office, suffered death on the gallows for his crime. 
Plow the London Assurance Company was defrauded of £2,000 
by a clever substitution of lives. How an " Eastern lady" ob- 
tained several thousand pounds from a London Office, on the 
sudden death of her husband advanced in years. How some fur- 
ther attempts by. the same lady, to "introduce" some other per- 
sons to the Life Offices, failed. How, at a later period, a whole 
batch of Offices were nearly swindled by the designing Thomas 
Griffith Wainright — the ■' Janus Weathercock" of his day — who 
first heavily assured, and then destroyed the life of the beautiful 
Helen Abercrombie. How an equally consummate, if less guilty, 
scoundrel, three times passed off his daughter, or, as most 
thought, his mistress, as dead, and each time obtained large sums 
of the Assurance Offices ! These, and many other occurrences, 
prove that the best of Institutions may be applied to the worst of 
purposes. The " Rugeley poisoning cases," and the " Joddrell 
policies," are amongst the more recent instances in this direction. 
We now pass on to the next period. 



CHAPTER V. 

THIRD PERIOD— 1816 to 1844. 



To speak of this as the Golden Age of Assurance Companies 
may seem to disparage those Societies established at earlier dates. 
Our intention is not to do this. Indeed, those early Companies 
which are still existing, speak for themselves ; they have all at- 
tained high positions, despite the difficulties they had to encoun- 
ter, and the doubt which, for a time, surrounded them. Of those 
still earlier Societies, which have, happily, long since passed away, 
Dr. Price truly said that to call them impositions on the public, 
proceeding from ignorance, and supported by credulity and folly, 
was " too gentle a censure." But we shall be fully able to justify 
our position by a review of the advantages the Companies of this 
period possessed over those which preceded them. 

These advantages may be ranged under several heads. First, 
and chiefly, the more accurate data which scientific investigation 
had placed at their disposal. Next, the rapid improvement which 
had been made, and was still taking place in the mortality of the 
kingdom. Third, the legislative encouragement which had then 
been newly bestowed upon Life Assurance. And lastly, as aris- 
ing out of all these, the improved public feeling which had set in 
in favor of such Companies. 

Reviewing these in their reversed order: Assurance Companies 
had no longer to battle with unnecessary parliamentary difficul- 
ties, or to offer bribes of such an amount as to well-nigh ruin 
them at their outset. An enlightened administration had seen 
the propriety of encouraging and multiplying provident associa- 
tions ; and a Prime Minister strengthened his position in the eyes 
of a mercantile nation, by announcing from his place in the House 
of Commons, his intention of exempting from Income Tax a por- 
tion of the income of those who had " recourse to that easy, cer- 
tain, and advantageous mode of providing for their families by 
assuring their lives' 1 '' — that portion being the amount which they 
invested in this manner. That the effect of this exemption was 
highly beneficial to the Offices of that period we have abundant 
proof; and although it has been more recently revived in a modi- 
fied form, we should not forget that we were originally indebted 
for it to that wise and great statesman, William Pitt, and that, 
too, at a period when Life Assurance, far more than now, required 
to be rendered popular. 

With respect to the improvement in the mortality of the king- 
dom, the facts are so surprising as to appear almost incredible if 
they had been presented by any less authority than that upon 



50 A SOLUTION OF THE 

which we have them. The late Dr. Griffith Davies found by "la- 
borious investigation " the same number of persons which, in tht 
early part of the 18th century, produced 106 deaths, would, at tht 
commencement of the present century, furnish only sixty-sh 
deaths, and from 1815 to 1820 only sixty-two ; hence the mortal- 
ity had been reduced two-fifths during the space of one century. 
The entire Table with the diminution at various intermediate pe- 
riods, will be given in our remarks upon Longevity. The effects 
of this improvement in mortality, so far as Lite Offices were con- 
cerned, are so apparent as to need no further comment here. An 
improvement is still going on, although not so marked as at the 
period of which we are speaking ; but this will be more fully 
gone into in our next division. There can be no doubt that to 
this favorable feature the large surpluses of some of the older 
Offices are, to some extent, traceable. To it we certainly owe the 
more equitable rates of some of the modern Offices. 

But by far the most important element in originating the sound 
Companies of this period was the improved scientific information 
they could command. Mortality observations were no longer 
confined to the London Bills of Mortality, at a period when they 
were known to be unusually high, or to the records of the town 
of Northampton, which had been dealt with as arising from a 
fixed population, whereas it afterwards turned out to be a pro- 
gressive or increasing one. A much more extended range of 
observation had been taken. Not only had Norwich, Warring- 
ton, Holy Cross, and Chester furnished confirmatory results to 
those derived from London and Northampton, but a series of ob- 
servations taken on the continent had been communicated to this 
country. Dr. Newmann had recorded the births and burials in 
the city of Breslau, up to the close of the 17th century, and Dr. 
Halley's Breslau Table of Mortality, constructed therefrom, had 
now come to be known. M. Kersseboom had investigated the 
register of assignable annuities in Holland, for a period of 125 
years before 1748, and drawn valuable conclusions therefrom. 
De Parcieux had examined the lists of the Tontine schemes in 
France and the Necrologies of the Religious Houses, and con- 
structed a Mortality Table, differing but slightly from the later 
results obtained in this country. Dr. Wargentin had condensed 
the results of seven enumerations of the entire population of Swe- 
den into a practical form. The mortality of Vienna, Berlin, Bran- 
denburgh, and the Canton de Vaud, Switzerland, had been sub- 
jected to a like scrutiny ; and to complete the enumeration, Mr. 
Joshua Milne had constructed from the observations of Dr. Hey- 
sham, upon the Mortality of Carlisle, that valuable Table which 
is now known throughout the world as the Carlisle Table of 
Mortality. The publication of this latter took place in 1816; 
from this, no less than from the completion ot the Northampton 
Table, may a new era in the Assurance world be dated. 

It is not our intention here to explain the essential merits or 



PROGRESS OF MORTALITY OBSERVATIONS. 51 

defects of the several Mortality Tables we have enumerated ; we 
shall have a special division for that purpose hereafter. But we 
have two points to notice as bearing upon the progress of Life 
Assurance. First, the remarkable similarity of results derived 
from these several sources — a similarity sufficient to remove all 
doubts even from the most sceptical ; and, next, the favorable 
mortality shown by the Carlisle Table, and confirmed by many of 
those just quoted, which enabled the Offices, taking this Table for 
their basis, to charge, at all the younger ages of life, a much less 
rate of premium than that demanded by the older Offices, and 
thus, by reasonably cheapening, tending to extend Life Assurance. 
On ages below 40, the difference in the "expected" duration of 
human life between the Northampton and Carlisle Tables ranged 
from 6 to 10 years in favor of the latter; while, with ages from 
40 to 80, the difference ranges from 4 years down to 1 at the ex- 
treme ages. 

Another favorable circumstance also assisted. The great suc- 
cess which had attended the Equitable Society up to this period had 
done much to popularize Life Assurance. Enormous "Bonuses," 
even although one knows he has to pay for them, are always 
attractive ! But the Equitable had done so much business that it 
became careless about doing any more, and by 1816, its doors 
were in effect nearly closed to new comers. There was an evident 
fear either that the Office would become unmanageable if many 
more new members -were admitted, or of selfishness on the part of 
those already assured that they would obtain too small a share in 
the surplus by its being divided amongst such large numbers. 
Hence, about the time we are speaking of, a resolution was come 
to, to confine the participation in the surplus to the 5,000 oldest 
existing policy-holders for the time being. Perhaps this decision 
was fortunate ; for it was better that the check should come vol- 
untarily than by the force of circumstances. With increasing num- 
bers the rates of bonus must have been very considerably reduced, 
or the stability of the Society endangered.* 

We have been particular in enumerating the advantages which 
were enjoyed by the Offices, originated at this period, not for the 
purpose of bringing them conspicuously into note, any more than 
their general soundness, good management, and success will always 
claim for them, but rather that such advantages should be re- 
membered before any invidious comparisons be drawn as against 
Offices which have had to encounter greater difficulties, or were 
too early or too late to participate in those or the like advan- 
tages. Never, perhaps, were there more great minds devoted to 
the investigation and perfection of a science, at any one period, 
than to the science of life probabilities at the period, or immedi- 
ately prior to the period, just passed in review. 

"We have had in England," remarks Mr. Samuel Brown, "Boyes, 

* Tide Mr. Morgan's addresses to the Court of the Equitable Society. 



52 POPULAR WRITERS ON 

Simpson, De Moivre, Halley, Stirling, &c; but we have carried out 
the practice in Life Assurance to a degree which, considering the 
short period elapsed, astonishes by the grandeur of the interests 
involved, and the vast amount of benefit which it has conferred 
upon Society." In 1830 appeared a Treatise on Probability, in the 
Library of Useful Knowledge, by Messrs. Lubbock and Drink- 
water, being the first attempt to make the subject popular to the 
great mass of the people; and, in 1838 Professor De Morgan, in 
his admirable Essay on Probabilities, and on their application to 
Life Contingencies and Insurance Offices, brought within the reach 
of the mere arithmetician the rules, which, if their demonstration 
must first be studied in the pages of Laplace, would be confined 
to Mathematicians of the highest order. The student who wishes 
to consult the higher branches of the subject in English may study 
with advantage the article on the "Theory of Probabilities," also 
by Professor De Morgan, in the Encyclopaedia Metropolitana, in 
which the substance of Laplace's great work is briefly given ; and 
a treatise on the same subject by Mr. Galloway, published origi- 
nally in the Encyclopaedia, Britannica, and afterwards, in 1839, in 
a separate volume, which contains a summary of the reasonings 
of Laplace, Condorcet, and Poisson. " Great," adds Mr. Brown, 
"as has been the progress already made, the application of the 
theory is still only in its infancy in this country."* 

On looking over the list of Offices of this period the reader will 
not fail to be struck with the large proportion bearing the desig- 
nation of "Mixed," as distinguishing them from the purely Pro- 
prietary, or the Mutual. Without here entering upon the merits 
of these several systems — although we intend doing so very fully 
in another place — we simply call attention to the fact. Many of 
these Offices, indeed, started Proprietary, but they have since, 
with one or two exceptions only, all become either Mixed ox Mu- 
tual. At the present time the proportion amongst the English 
Offices generally, is Five mixed to one mutual Office; and many 
which call themselves mutual are, in reality, founded on the mixed 
principle. 

It is not to be supposed that the chronological list appended to 
this chapter contains anything like the number of Offices that were 
started in the period of which we are speaking. Even in the 
" Golden Age," Companies sprang up like gnats on a summer's 
evening, and disappeared as suddenly. From 1816 to 1826, we 
are told, more Companies had been broken up than had been suc- 
cessful. Some went down in total insolvency ; others lost a large 
portion of their capital; another set of directors paid the Provi- 
dent £21,000 to take their risks off their hands. Where is the 
Jiainbow or the Philanthropic? the Hercules\ or the St. James's? 
the Bt. Patrick and the Shamrock? Echo answers " Where ?" Yet 
these were all veritable Assurance Offices in the days of yore. 

♦Assurance Magazine, vol. vi. p. 147. 

+ A new Hercules was founded in 1863. We wish it a better fate than its predecessors.— 
Note 1866. 



CONDITIONS OF SUCCESS. 53 

Jealousy was as rife in those days as now, and there was a strong 
feeling against the new Offices. The Alliance started in 1825, and 
having a Marine Assurance Branch, was a great source of annoy- 
ance to the Companies who had, at an enormous outlay, charters 
with exclusive rights. But the Office was respectably and economi- 
cally managed, and it has succeeded. With these conditions there 
is still a fair chance for all; and we most entirely agree with a 
popular writer upon the subject, that " the old Companies have 
nothing to fear from the increase of fairly constituted rivals." 
What they have to fear, and what all who are interested in the 
progress of Life Assurance have to fear, and mourn at, is the con- 
stant establishment of Companies holding forward delusive prin- 
ciples, or having no higher aim than to provide handsome incomes 
for pretentious Managers, and needy Directors — men who neither 
deserve success nor know the means of securing it. This appro- 
priately enough brings us to the next section of our subject. 



CHAPTER VI. 

FOURTH PERIOD— 1844 to 1862. 



The period we have just passed over did much to popularize 
the practice of Life Assurance in this country. The speculative 
Companies of a former period had passed out of memory. The 
principles of the existing Offices were fast becoming consolidated ; 
and the Companies themselves recognized as amongst the most 
valued monetary Institutions of the country. The magnitude of 
their transactions was only equalled or surpassed by those kindred 
Institutions, Banks ; and the promptitude with which they met 
their engagements deservedly placed them high in public confi- 
dence. It was not to be supposed that such a state of things 
could long continue without a "dark side." Those who know 
most of human nature know, and deplore, that the best of Insti- 
tutions are the most liable to abuse. This has been proved more 
than once in the History of Life Assurance. The favorable results 
w T hich had been achieved by sound management of the old Offices 
— more particularly the bonuses of the Equitable — which public 
rumor had extended even beyond their almost fabulous reality, 
had, coupled with a want of popular and correct knowledge of 
the principles and practice of Life Assurance, raised public expec- 
tation to a high pitch. To this circumstance, combined with the 
unlimited confidence before referred to, must we look for a solu- 
tion of that blind reliance which was placed in many of the swin- 
dling schemes which were brought forward in the earlier years 
of the period we are entering on, and in the numerous abortive 
projects whose concoctors, after exhausting the large funds placed 
at their disposal, have left their dupes to ascertain the extent of 
their remaining liabilities, through communications made to them 
by the Vice-Chancellor's officials. 

Our exposition would be incomplete if we were not to go back to 
the great West Middlesex swindle, which maybe regarded as the 
precursor of those Ave are about to speak of. It was originated in 
1836, by tw T o scoundrels, one of whom had been a journeyman 
shoemaker and a smuggler, and the other, William Hole, had 
been a tallow-chandler and a bankrupt. These two men con- 
trived to draw from the public no less than £200,000 or £250,000 
by the sale of Annuities at some thirty per cent, more favorable 
terms than any other existing Office could afford to offer, and by 
granting Life Assurances at similar reductions from the ordinary 
rates. Handsome Offices were opened in London, Edinburgh, 
Dublin, and Glasgow, and the newspapers of the day teemed 



ADVENT OF THE " POST MAGAZINE. 55 

with their advertisements. Money came in from all quarters : 
but chiefly from those who should have been better informed, viz. : 
clergymen, half-pay officers, and people in the more genteel ranks 
of society. These are the classes who most suffer by such schemes. 
The man of business is too wary to be caught by such transpar- 
encies. 

If the disappointment and ruin which this one fraudulent 
scheme occasioned could be truly depicted, there is nothing in 
the realms of fiction which could equal it. 

There was then no periodical specially devoted to the exposure 
of such schemes and their promoters ; — and we may add, happily, 
none to bolster them up, and thus aid and abet in the disgraceful 
work. It is true Mr. Peter Mackenzie, the editor of the Scottish 
Reformers Gazette, published in Glasgow, did take great pains 
to expose this scheme, and must have incurred considerable out- 
lay in defending the several actions which were brought against 
him ; but he was too far from his work, and it was only when he 
bad induced Sir Peter Laurie to commence an exposure in London, 
that the bubble really burst. But the evil, to the extent indicated, 
had already been accomplished. 

How many similar schemes might have followed, and what 
mischief those which did follow might have done, but for an 
event which is closely allied with the Insurance history of this 
period, we, of course, have no means of knowing. Vast as the 
Insurance interest had at this time become, it had no special or- 
gan devoted to it, or to watch over its progress. The public 
interest, although great, was hardly of a character to commend it 
to the newspapers ; and they (the newspapers) were hardly in a 
position to do the work well, for it required almost individual at- 
tention. About the year 1840, however, this defect was remedied 
by the establishment of the Post Magazine, a small weekly pub- 
lication issued at the low price of one penny. Prior to the ap- 
pearance of that little periodical, Life Assurance had not been re- 
garded by the press of this country as a suitable topic for public 
discussion ; and, probably, not one individual in twenty had any 
very accurate notion of what was meant by a Life Assurance In- 
stitution. 

Those who have the advantage of being personally acquainted 
with Mr. J. Hooper Hartnoll, the originator, proprietor, and edi- 
tor of that Magazine, know how distasteful any personal adula- 
tion (even in these pages, which owe so much of any merit they 
may possess to his sound critical judgment) would be to him. He 
is one of those silent workers to whom the world owes so much, and 
goes on oicing it ! But even this circumstance must not prevent us 
from completing our historic outline. The " special services " 
which called that Magazine into fuller action, after the passing 
of the Act, 1844, happily now only exist in a limited degree; and 
many of its present readers only know by hearsay of its dauntless 
efforts some 18 or 20 years ago, in attacking parties who had com- 
bined for purposes of fraud, and given to their infamous projects 



56 THE JOINT-STOCK COMPANIES' ACT, AND WHAT FOLLOWED. 

the alluring title of Assurance Associations. Week after week, and 
year after year, it exposed schemes scarcely less daring than those 
of " West Middlesex ;" — schemes only rendered less successful by 
reason of early exposure. Actions were brought against the edi- 
tor, but he kept his ground and never flinched from his task until 
he had unearthed the whole nest of insurance swindlers of that 
period. A condensed history of some of these schemes was sub- 
sequently furnished in Mr. HartnolPs letter to the then President 
of the Board of Trade, the Right Hon. E. Card well, published in 
1853. 

As we shall probably have, in another division of this work, to 
refer more in detail to some of the "bubble schemes" of this pe- 
riod, we will only here stop to record the names of the principal 
of them, and then proceed with our narrative. The Sea, Fire, 
Life deserves, in every respect, to rank next to the West Middle- 
sex. The Merchant Traders, the Port of London, and the Gen- 
eral Commission Offices, concocted by the same parties, relate 
more particularly to Marine Insurances — and pretty well they 
took in the Marines! The London Marine Brokers had a Life 
branch, and issued Indisputable policies ! Then came the Recip- 
rocal Life Office, which in all that was bad, reciprocated most 
entirely with those just named ! This was followed by the Hope 
Reversionary and Life, the Annual Bonus, (fit offspring Of the 
Counties Union,) and the Family and Commercial Life Offices ; 
the last of this batch being the European Full Pay Alliance Insu- 
rance Company, and the Independent Assurance Company, long 
since wound up in Chancery. 

The circumstances attending the " West Middlesex swindle," 
at length drew the attention of the Legislature to the subject ; — 
in like manner as the prevalence of gambling assurances, and the 
evil consequences resulting therefrom, had led to legislative mea- 
sures a century before. Accordingly, towards the close of 1 844, 
an act was passed imposing certain restrictions upon all Insurance 
and other Joint-Stock Companies thereafter to be founded. But 
while the Act against gambling assurances did ultimately lead to 
their discontinuance, the Act for the regulation of "Joint-Stock 
Companies " did not, so far as Insurance Companies were con- 
cerned, succeed in its purpose, but had rather a contrary tendency, 
as the continued exposure in the Post Magazine of schemes con- 
cocted under protection of the Act, abundantly established. 

In 1845, the first year after the passing of the first Joint-Stock 
Companies' Act there were no less than forty-eight Life Assurance 
Companies provisionally registered* Of this number twenty-one 
only, or less than one-half, became completely registered ; and of 
these but four are now in existence ! An able writer of that pe- 
riod drew the following comparison :— -" Fertile as the year 1845 
has been in railway projects, the majority of which, like the Jew 
pedler's razors were made for sale and not for use, it has been no 
less so in new assurance offices." He remarks that the evils from 
railway speculation may be only temporary ; but " not so transient 



FAMILY KELATIONSHIP OF OFFICES. 57 

or temporary is the evil that will arise from these new assurance 
offices it* they are not based upon sound principles and prudently 
conducted." He adds " a scheme of this kind is concocted no less 
easily than a railroad; its birth-place being in like manner the 
solicitor's office, and its object the especial benefit of the firm, and 
its friend the secretary — or as is now the more favorite term the 
Managing Director /"* and this is unfortunately too true, in many 
instances, even yet. Mr. Pateman, the late publisher of the Post 
Magazine ; who, by virtue of his office, had been brought into 
frequent contact with the promoters of Insurance Companies, as- 
certained the following particulars regarding the " promoters " of 
the seventy Life and Fire Offices registered in 1852. Of gentle- 
men there were thirty, and of esquires ten ; of merchants ten, and 
of actuaries and secretaries twelve ; of barristers six ; of solicitors 
eight ; of surgeons and warehousemen three each. There was an 
author and a shoe manufacturer ; a doctor of divinity and a gro- 
cer; an artist and an M.P. ; a civil engineer and a baronet ; a bul- 
lion merchant, and the manager of a Life Office ; an architect and 
a Life Assurance agent ; a calico printer and a marble merchant ; 
a cabinet-maker and a manufacturer ; a printer and a farmer and 
grazier ; an iron merchant, and a provision merchant ; a sharebroker 
and a publisher; a naval pensioner, and a shipowner; a builder 
and a lieutenant-colonel ! 

It was not alone from the projection of schemes, by persons 
wholly unacquainted with the principles of Life Assurance and 
the practice of the Offices, that discredit was brought upon this 
class of Institutions. The facility with which Companies could 
be formed under the Act of 1844, and Managerships obtained, 
offered irresistible temptation to certain ambitious clerks in In- 
surance Offices, to endeavor to become Secretaries, or Managers, 
" before their time." Accordingly, we find a person who had 
graduated as a kind of half-clerk, half-messenger in a respectable 
Office, instituted in 1839, passing from that employment to the 
Managership of an Office which he had assisted to establish in 
1841 ; — quitting the latter Office, under circumstances we are not 
acquainted with, and establishing a new Company (1848), of 
which he stood in the triple capacity of Promoter, Actuary, and 
Secretary; — again on the move in 1852, and forming a new Com- 
pany, which only lasted sufficiently long to occasion a heavy loss 
to the deluded shareholders ; — and finally, becoming Manager of 
a Company instituted in 1854, and winding-up in Chancery in 
1857. 

We abstain from giving the names of the Companies; but with 
respect to the Collingridgef lot, there is no necessity for any such 
reserve. Out of the Merchant Traders' (1845), sprang the Gene- 
ral Commission (1846), from which arose the Port of London 
(1847), which gave birth to the Sea, Fire, Life (1849) ; — and the 
Post Magazine, happily for Society, smothered them all. Some- 

* Life Assurance Offices, 2?ew and Speculative, published 1846. 

t In no way connected with the widely-respected proprietor of the Ctty Press.— Note* 1866. 



58 OFFICES IN CHANCERY. 

times projectors run in couples. For example, the Sea, Fire, 
Life (1849), having been sold up (1850), the Actuary, and one 
of the clerks in the Office, instituted a new Company (1850), 
which, becoming ashamed of its name, was converted into an- 
other new Company in the same year ; and this latter Company 
has since lost its identity by amalgamation. The happy pair, 
however, soon separated; and the Actuary formed a Company 
on his own account (1851). Speedily retiring from the Manager- 
ship, with a bonus, he formed another Company in the same year 
(1851) ; — retired from the Secretaryship with a like bonus, at the 
end of two or three months ; and has since filled up his time by 
giving professional advice to Companies that are poorly. The 
clerk, who had noviciated in a Company established in 1847, and 
passed through the aforesaid professorships, also set about esta- 
blishing a Company on his own account, 1851. In the following 
year (1852) he formed a second Company; and both have now 
entered into the bonds of matrimony with a Company formed in 
1856; receiving into the family an orphan, born in 1854. We 
might also refer to the fecundity of a Company established in 1 848 ; 
whose seceding Actuary established two Companies in 1850, a 
third in 1852, and a fourth in 1853. The Warwick of Company- 
makers, however, is the gentleman who established a Company 
in 1838 ; — quitted the Managership in order to form a new Com- 
pany in 1839; — continued quiet for three years ; but started an- 
other Company in 1842 ; — another in 1843; — another in 1847; — 
and another in 1854. Out of these Companies arose three others 
in 1851 and 1852. Here is a progeny of nine offices springing 
directly from one parentage; and if we were to stop to trace 
more indirect influences this number would probably be nearly 
doubled ! The genealogy of six other Companies was given in 
the Post Magazine, January 5, 1856 ; — a rev. gentleman now on 
his travels, and an ex-clerk from an Office in Cheapside, being the 
unhappy heads of the family. 

Notwithstanding the exposure of such schemes in the pages of 
the periodical before referred to, still many of them contrived to 
obtain large suras of money, and still more will be required from 
the sufferers on their winding-up — for the greater part of them 
have arrived at that process. The loss, of course, falls either on 
the shareholders or the insurers : for the most part, and very 
properly, on the former. In all cases, the assurers suffer by miss- 
ing the advantages they might receive, for the same outlay of 
premium, in better-constituted Companies. In several, the loss 
has been more direct, by the policies remaining unpaid, as with 
the Independent, the Tontine, the Counties' Union, the Sea, 
Fire, Life, the Reciprocal, and some others. In the cases of the 
Oak and Security, mutual Offices, the assurers have been held 
liable for the debts of the Societies. 

The following Offices,* chiefly of this period, are now winding- 
up in the Court of Chancery : — 

* These Offices appear again in our list of defunct Companies. Some of them had t at the 



DEFINITION OF "BUBBLE COMPANIES. 



59 



Agriculturist. 

Amazon. 

Athenamm. 

Birbeck. 

British Exchequer. 

British Provident. 

Caxton. 

Commercial & General. 

Consols. 

Cosmopolitan. 

Defender. 



Deposit and General. 

English& Irish Church. 

Era. [Need. 

Financial Friend - in - 

General Indemnity. 

Herald. 

Home Counties. 

Hull and London. 

Justice. 

Life Assur. Treasury. 

London and County. 



London Mercantile. j Protestant. 
Lond. & Westminster. Public. 
Merchant Traders. Saxon. 
Mitre. Sea, Fire, Life. 

National Alliance. | Security. 

National Assur. Invest. Times. 



Oak. 

Observer. 

Parental Endowment. 

Phoenix. 

Professional. 



Universal Provident 
Waterloo. 



The majority of the unsuccessful Offices transfer their business, 
and wind-up by mutual arrangement. At the close of this Chap- 
ter, a list of the Offices which have done so, and indeed a list of 
all those which have discontinued business since the passing of 
the Joint Stock Companies Act, is given. The list numbers 
some 120 Offices, and we fear is still incomplete. The causes of 
the failure of so many Offices may be classified under a very few 
heads: 1. Want of bona fide intentions at starting. 2. Want of 
practical experience on the part of the promoters. 3. Extrava- 
gant and unsound management. 

It is far from our intention to imply that all the Offices of this 
period come under the denomination of " bubble Companies." 
We by no means join in the cry against the new Offices, except 
so far as the reckless proceedings of many of them have exposed 
them to censure. It is as unjust to believe all the new Com- 
panies to be bad, as it is foolish to believe them all to be good, 
in the face of the flagrant disclosures to the contrary. We can 
point to some of the Offices of this period as achieving success — 
all circumstances taken into account — which has never been sur- 
passed ; and there are other Offices that have established a re- 
spectable business at a very small cost. We refrain from giving 
names ; as it is not our object to flatter particular Companies, at 
the expense of others which are possibly destined to become 
equally successful. The elements of sound management and eco- 
nomy are undoubtedly required, in order to secure success for an 
Assurance Office. But are they not equally necessary in any 
other mercantile undertaking ? The funds of an Assurance So- 
ciety are only the more sacred because they are held in trust for 
the benefit of widows and children; and he who would wilfully 
squander them should be held a criminal, and a traitor to his spe- 
cies ! Nor should we forget the dictum of Mr. Finlaison, late 
Government Actuary, the truth of which all who are practically 
conversant with Insurance history, must admit, "that thousands 
and thousands are brought to insure their lives by the agency of 
young Offices, who otherwise never would have heard of Life 
Assurance at all, and never would have come at all."* 

It may be desirable — in order to avoid injustice to those that 
are respectable — to give some definition of " Bubble Companies," 
and we cannot improve upon that furnished by the Parliamentary 



time of suspending operations, a business of sufficient magnitude to be transferred to othel 
Offices. Where this has been done, the fact will be stated in the list. 
* Examination before Select Parliamentary Committee, 1853. 



60 A PRETTY NEST OP SHAEEHOLDEES. 

Committee on Joint-Stock Companies, which sat in 1844. They 
classified them under three heads : — 

1st. Those which, being faulty in their nature, inasmuch as they 
are founded on unsound calculations, cannot succeed by any 
possibility. 

2nd. Those which, let their objects be good or bad, are so ill con- 
stituted as to render it probable that the miscarriages or fail- 
ures incident to mismanagement will attend them ; and 

3rd. Those which are faulty, or fraudulent in their object, being 
started for no other purpose than to create shares for the pur- 
pose of jobbing in them, or to create, under pretence of carrying 
on a legitimate business, the opportunity and means of raising 
funds to be shared by the adventurers who start the Company. 

In the first class may be comprised those Offices which are 
continually springing up, offering "advantages" totally incom- 
patible with the rates of premium charged : advantages which 
Offices with their accumulated millions would not dare to offer, 
because they would know they could not perform them! 

The second is, perhaps, a still more numerous class. Indeed 
it is not too much to say, that at least one half of the Offices in- 
cluded in our list of defunct Companies might have succeeded 
under proper management : that is to say, that if, instead of a 
course of disgraceful profusion, as evinced in elaborate offices, an 
extensive staff of officers, and liveried messengers, they had com- 
menced, as did the old Equitable, the Scottish Widows' Fund, or 
the Mutual, with the fund for management expenses provided 
out of the Directors' pockets, and every step had been taken with 
due regard to the expenditure the Office could properly afford. 
Offices so managed have a vitality which no competition can de- 
stroy, and achieve successes which in after years are looked upon 
as little short of fabulous. 

To the third class, happily, a check has been interposed; not, 
indeed, by legislative measures; for these, from their incomplete- 
ness, have rather opened up fresh facilities ; but as we have seen, 
by the enterprise of individuals actuated by a desire for the 
public good. An instance of the manner in which these schemes 
ha T ;e been, and for aught we know may yet again be, brought 
before a " deluded public," may be productive of good, and is 
strictly illustrative of the period we are now upon. 

The Company we select shall be the London Marine Brokers, 
which endeavored to secure public confidence by opening an ac- 
count ; or, at all events, by announcing as its bankers, the Royal 
British Bank ! and by registering a list of forty shareholders, 
purporting to hold some 1,000 or 1,200 shares in the concern. 
Our authority is the report of the Parliamentary Committee on 
Assurance Associations in 1853 : their authority the Post Maga- 
zine. No. 1, the promoter of the Company, J. N. Burnand, held 
20 shares ; No. 2, Joseph Williams, a coffee broker, 50 shares ; 
but he declared he had never heard of the Company, and knew 



THE PARLIAMENTARY COMMITTEE, AND ITS REPORT. 61 

nothing about any shares ; No. 3 was Richard Hopkins whose 
address turned out to be a public house, and the landlady de- 
clared she had occupied the place for nineteen years, and no such 
person had ever lived there ! Robert Richardson was put down 
for 20 shares, and his address Oxford Market, but no such person 
could be found. William Joyce, who figured for 30 shares, upon 
enquiry was also non est. The same of Henry Somerset and his 
10 shares. Henry Bladon Savory, who stood for 50 shares, was 
found ; his wife was a char-woman, at " 26, Hunter-street, Bruns- 
wick-square." Savory was described in the Share-list as an ac- 
countant * whereas his real occupation was that of porter to the 
Company, at their Office, Royal Exchange Buildings ! All those, 
indeed, who turned up at all, turned up bad. One who was re- 
puted to have signed his name for 40 shares, was found only 
capable of "making his mark." Another had been employed to 
"get names" to powers of attorney for the Company. A third 
had signed for shares " because others did so ;" and the last ab- 
solutely signed for a " pot of beer." Surely a case has been made 
out in support of our title of "Bubble Companies !" 

It is a fortunate event that such a large proportion of the new 
Offices have so early ceased to exist ; for if many of them had 
continued longer, and pursued the same course of management, 
the evil would have been very much greater. The penalty of un- 
sound management is, that it produces its own remedy: for pub- 
lic confidence is shaken, and the scheme falls to the ground — the 
assured it is to be hoped, gaining wisdom, and seeking in future 
more solid establishments. The average duration of the Offices 
included in our " discontinued " list would probably not exceed 
one year. Every year the public is becoming more cautious, and 
therefore the chances of the bubble Companies so much the less. 
There are fewer unsound Companies now existing than there were 
ten years since. The worst have passed away, and new ones 
have not lasted long enough to take their place. See what the 
last few years have clone. Where is the Deposit and General, 
the Protestant, the United Life and Guarantee, and the Oak? 
The Athenaeum, the Hope, the Amazon, the Beacon, the Univer- 
sal Provident, and the London and County, no longer disgrace 
the list. Every year clears off a few more of the unsuccessful oc- 
cupants. It was owing to this gradual process of absorption 
that the public was disappointed at the result of the enquiry by a 
Select Committee on Assurance Associations, in 1853, as indeed 
was the Committee itself: — 

" With regard to tlie general condition of existing Companies, so far as any 
evidence has been laid before your Committee, they feel it their duty to report 
that it is more satisfactory than they had been led to believe before they en- 
tered wpon the enquiry." " No doubt," continues the report, " instances of 
great abuses and flagrant frauds have been disclosed by the witnesses exam- 
ined ; but in general these consisted of an open violation of all law, more 
akin to swindling than to regular trade, and such as it would be difficult for 
any Legislature to prevent, so long as private persons exercise so little precaiir 
tion in the conduct of their own affairs" 



62 



GENERAL RETROSPECTIVE REVIEW. 



This rebuke is wisely administered. Now a word on the gene- 
ral state of the Insurance Law. 

" But while the Committee are enabled to speak in these satisfactory terms 
of existing Offices, so far as the evidence has gone, their attention has been 
called to the great facilities which exist under the present state of the law, 
for Insurance Companies, in common with others, being brought into exist- 
ence with no reasonable prospect of, or guarantee for, success ; and not un- 
Jrequently without any bona fide intention of transacting business." 

One other point, bearing directly upon the Insurance history of 
this period, is the establishment, some twenty years since, of the 
Institute of Actuaries, with a view of improving the status of 
that profession, and more particularly for the purpose of affording 
its younger members the opportunity and the inducement to be- 
come thoroughly proficient in the varied branches of knowledge 
required by Actuaries and Managers of Assurance Offices. The 
Assurance Magazine, the organ of the Institute, affords an impar- 
tial medium for the discussion of scientific questions ; many of the 
papers read before the Institute, and afterwards printed in its 
pages, are of great practical and historic value ; and it is not too 
much to expect, that the next generation of offices and assurers 
will reap the benefit of this step. 



Date. 


Mutual 
Assurance 
Companies 
provisionally 
registered. 


Mutual 
Assurance 
Companies 
completely 
registered. 


Assurance 
Companies 
other than 

Mutual 
provisionally 
registered. 


Assurance 
Companies 
other than 

Mutual 
completely 
registered. 


Total 

Assurance 
Companies 
provisionally 
registered. 


Total 

Assurance 
Companies 
completely 
registered. 


Number 

existing 

end of 

1866. 


1844 

1845 

1846 

1847 

1848 

1849 

1850 

1851 

1852 

1853* 

1854* 

1855* 

1856* 

1857* 

1858* 

1:59* 

1860* 

1861* 

1862* 

1863* 

1864* 

1865* 

1866* 


nil. 

6 

4 

2 

6 

9 

3 

7 
12 






























nil. 
4 
3 
2 
5 
4 
1 
6 
2 
















4 

42 

20 

24 

17 

31 

25 

30 

44 






























1 

17 

8 

13 

10 

14 

10 

12 

15 






























4 

48 

24 

26 

23 

40 

28 

37 

56 

30 

51 

40 

19 

5 

9 

5 

5 

11 

9 

12 

9 

15 
13 


1 

21 

11 

11 

11 

11 

18 

11 

17 

10 

36 

19 

8 

2 

4 

5 

.3 

4 

5 

8 

8 

9 

10 




1 

2 
1 
2 

1 
1 
3 
3 
4 
3 

1 


1 
1 
3 
2 
4 
6 
5 




27 


27 


237 


100 


519 


258 


44 



* In consequence of the Mutual Offices not being distinguished in the Registrar's Re- 
turns, we have been unable to maintain the above distinctions during these years. 



GENERAL RETROSPECTIVE REVIEW. 63 

The preceding Tables, showing the number of Life Assurance 
Companies which have been provisionally registered since the 
Joint-Stock Company's Act came into operation in September, 
1844 — the number of them which have obtained complete regis- 
tration, and again, the number oK these latter which are in exist- 
ence at the present time, will form an appropriate conclusion to 
our remarks on " bubble Companies." 

During the same period several Life Offices have been founded 
with Deeds of Settlement ; and several other officos transacting 
Life business are registered under the Friendly Society's Acts. 



CHAPTER VII. 

FIFTH PERIOD— 1862 to PRESENT TIME. 

(" LIMITED LIABILITY" COMPANIES.) 

During the whole of the preceding period, 1844 to 1862, the 
law relating to Joint-Stock enterprise was in a very unsettled 
condition, and especially so as regarded Insurance Companies. 
The object of the legislation of that period was to develope 
the principle of " Limited Liability ;" but Insurance Companies 
were intentionally excluded from the operation of that principle. 
It was contemplated to legislate for them specially, as Joint-Stock 
Banks had been specially legislated for. 

In the session of 1856, Mr. Wilson (of " Economist" celebrity) 
the then Secretary of the Treasury, introduced a Bill to Parlia- 
ment, with a view to the improvement of the law regarding 
Insurance Companies ; but partly from being considered incom- 
plete, and partly, we believe, from the opposition of the older 
offices, it was withdrawn in an early stage. One of the provisions 
of that Bill was that the registration and publication of accounts 
should apply to all then existing, as well as to all future com- 
panies. It may be regarded as a misfortune that these require- 
ments have not become law. 

It so happened, probably in view of the contemplated special 
legislation referred to, that in July, 1856, the provisions of the 
Joint-Stock Company's Act of 1844, so far as they related to 
Insurance Companies, became suspended. This state of things 
was rectified by a short act passed in August, 1857. The 
returns of Companies established during the close of 1856 and 
the first eight months of 1857, are consequently more or less 
defective. 

Matters went on under the restored law of 1844 until the Par- 
liamentary Session of 1862, when, the principle of Limited Lia- 
bility having grown greatly into favor, a large and comprehen- 
sive measure was introduced, which was intended to supersede 
all previous Joint-Stock legislation, and consolidate it for the 
future. This measure became law, and came into operation on 
the second day of November of that year. Its title is " The 
Companies Act, 1862," and stands in the statute book as 25 and 
26 Vic, c. 89. It contains no less than 212 sections, and no 
inconsiderable portion of its provisions relate to the " winding 
up" of Companies. 

We regard 1862, therefore, as a new era in assurance history. 
The blessings of Limited Liability, such as they may be, were 
then for the first time extended to Insurance Companies of all 



"limited liability" companies. 65 

descriptions thereafter to be founded ; and we believe the change 
was a prudent one. 

The Companies hitherto founded under the new law have not 
been numerous. This may arise from attention having been 
called to a variety of other channels of enterprise. Those which 
have been founded bear the impress of respectability. They do 
not rank. as mere conceptions, but have the stamp of bona fide 
intentions. Copies of the accounts of these Companies have to 
be filed at the office of the Registrar of Joint-Stock Companies 
(Sergeant's Inn, Fleet Street), within fourteen days after the 
hoi ling of their annual meetings. The articles of association 
under which they are governed, and all subsequent alterations to 
the same, and also a list of shareholders, corrected from time to 
time, have also to be registered at the same place, and can be 
referred to by any body on his paying the small fee of sixpence. 
Policy-holders in these Companies will now have the means 01 
knowing something of the true state of matters, and the public 
press is very much on the alert. 

The real advantage of the Limited Liability law appears to us 
to be — apart from the technical advantages just enumerated — that 
really responsible persons may become shareholders without 
undue risk. A shareholder may limit his loss, if things go wrong, 
to one hundred, one thousand or ten thousand pounds, according 
to his means, but he need not be ruined. Under the old law of 
unlimited liability, shareholders in Insurance Companies (and 
until lately also in Banks) stood to lose all they had, and good 
men were accordingly shy. Insurance projects therefore too 
often fell in the hands of reckless men who had no capital to lose, 
and so the loss really fell upon the policy holders. 

But there is still the other side to the question. Inasmuch as 
the loss to the shareholders is limited to their aggregate holding 
in shares, the security of the policy holders is limited to a like 
extent in the event of matters going wrong. Therefore the 
character and management of the office become matters of vital 
importance. The law provides both to agents and policy holders, 
the means of knowing the financial position and also the con- 
stitution of these modern companies : prudence must do the rest. 

Taking a general retrospective glance at our subject, it is 
noticeable that some periods in Assurance history seem to have 
been far more congenial to the growth of good Offices than other 
periods, oftentimes, not very far remote. 1806 furnishes us with 
our first example. The offspring of that year were both nu- 
merous and strong. 1823 gives a still more notable example. 
1824 has much to be proud of; while 1825 produced some of the 
best Companies of the "golden age." Taking a leap of ten 
years, 1835 placed two champions on the list; and 1836 furnished 
a series of sound offices. This picture has its converse. Some 
periods in Assurance chronology seem to have been beset with 



dhficulties. See the melancholy list of "defunct Companies" to 
be presently given. We have not the means of carrying it as 
far back as we could wish, but it goes far enough to prove our 
present case. In 1839 the "epidemic" shows itself. Of some ten 
or a dozen Offices ushered into the world that year but one sur- 
vives to tell the tale. Of the various Offices of 1841 and 1842, but 
one is still remaining. 1845 produced a weak and puny offspring, of 
which the greater part have long since "departed this life." 1849 
was the era of "Assurance swindles," but, happily, they have all 
died out — not one survives to mark the period. 1850 involved 
many of the unsound Companies in ruinous losses ; and from that 
period down to the present time, the Court of Chancery, and the 
Bankruptcy Court, have had constant employment in " winding 
up" Assurance schemes and their promoters, while members of 
the "legal profession," and "auctioneers," have also made some 
rich harvests in the misfortunes of a portion of the not alvmyz 
" discerning public !" 



The following Tables elucidate the foregoing chapters : they 
are revised down to June, 1867, and, taken together, furnish a 
more complete list than we believe has been hitherto published. 



CHRONOLOGICAL TABLE. 

Of the Establishment ot all the existing Life Offices, together with a statement of the 
principles upon which they were, and are founded ; the business they transact, and their 
legal powers; divided into several periods corresponding to the divisions of tho tore- 
going chapters. 

FIRST PERIOD. 



Present and Original Names 
of Offi.es. 



Powers under which they act. 



1721 Royal Exchange . 
" London Assurance 



. Mixed 
Mixed 



.Life and Fire 
. I Life and Fire 



Incorporated by Charter. 



SECOND PERIOD. 



1762 


Eqvitable 


Mutual 


Life 


Deed enrolled in Queen's Bench. 


1797 


Pelican 


Mixed 


Life 


Special Act. 


1806 


London Life 


Mutual 


Life 


Enrolled in Court of Cn. Pleas. 


it 


Provident 


Mixed 


Life 


Deed of Settlement. 


11 


Rock 


Mixed 


Life 


Deed of Settlement and Acts. 


1807 


Eagle 


Mixed 


Life 


Special Act, 53 George III., &c. 


" 


West of England 


Mixed 


Life and Fire . . 


Special Act in 1813. 


1808 


Alias 


Mixed 


Life and Fire . . 


Special Act, 54 George III., c. 79. 


" 


Noi~wic7i Union 


Mutual . . 


Life 


Special Acts. 


1810 


Sun 


Mixed 


Life 


Special Act, 54 Wm. IV., c. 47. 


1814 


Union 


Mixed 


Life and Fire . . 


Deed of Set. and Special Act. 


1815 


Scottish Widows' Fund . . 


Mutual 


Life 


Deed of Settlement and Acts. 



TABLES. 



67 



THIRD PERIOD. 



F„, Present anil Original Names 
r ' U | of offices. 


Principles. 


Nature of 
Husiness. 


Powers under which they act. 


1820 Imperial 


Mixed 


Life 


Act of Pt. 4 and 5 Vic , c. 94. 


1821 Guardian 


Mixed 


Life and Fire . . 


! Special Act, 13 and 14 Vic. 


1822 National of Ireland 


Mixed 


Life and Fire . . 


Incorporated by Charter. 


1823 Economic 


Mutual 


Life 


Special Act, 3 Wm. IV. 


" Edinburqh 


Mixed 


Life 


Special Act, 8 and 9 Vic, c. 76. 


" \North BritishS Mercantile 








(late North British) . . 


Mixed 


Life and Fire . . 


Royal Charter and Special Act. 


M \Law Life 


Mixed 


Life 


Deed of Set. and Special Act. 


1S34 Alliance 


Mixed 


Life and Fire . . 


Special Acts, 5 Geo. IV., c. 137. 


" \ Clerical. Medical, & Gen. 


Mixed 


Life 


Special Act, 13 and 14 Vic, c. 9. 


it 


Patriotic (Irish) 


Mixed 


Life and Fire . 


Special Act, 5 Geo. IV., c. 154. 


u 


United Kent 


Mixed 


Life and Fire . . 


Deed of Settlement. 


It 


Yorkshire 


Proprietary 


Life and Fire . . 


Special Act, 2 Wm. IV. 


u 


Scottish Union 


Mixed 


Life and Fire . . 


Royal Charter and Spec Act. 


1S25 


Crown 

Scottish Provincial (late 


Mixed 


Life 

• 


Deed of Settlement. 




Aberdeen) 
Standard (late Life Insur. 


Mixed 


Life and Fire . . 


Special Act of Incorporation. 


it 










Company of Scotland) . . 


Mixed 


Life 


Special Act. 


»' 


University 


Mixed 


Life 


Royal Charter. 


1826 


Scottish Amicable . . 


Mutual 


Life 


Special Act. 


1829 


Clergy Mutual 


Mutual 


Life 


Special Act, 10 Geo. IV., c 56. 


18:30 


National 


Mutual 


Life 


Deed of Settlement. 


1S31 


Scottish Equitable .. 
Friends' 1 Provident 


Mutual 


Life 


Royal Charter and Special Acts. 


1832 


Mutual 


Life 


Enrolled under 3 and 4 Vic 


1833 


Argus 


Mixed 


Life 


Spec. Act, 5 & 6 Wm. IV., c 76. 




Caledonian 


Mixed 


Life and Fire . . 


Royal Charter and Spec Act. 


1S34 


Mutual 


Mixed 


Life 


Deed of Settlement. 


" 


Universal 


Mixed 


Life 


Special Act. 


1835 


Metropolitan 


Mutual 


Life 


Deed enrolled in Chancery. 




National Provident 


Mutual 


Life 


Friendly Soc & Discharge Acts. 


»« 


Nottingham and Derby . . 


Mixed 


Life and Fire . . 


Deed of Settlement. 


1836 


Hand-in-Hand 


Mutual 


Life 


Deed Enrolled. 




Legal and General 


Mixed 


Life 


Deed of Settlement. 


« 


Liverpool&London & Globe 










(late Liverpool&London) 


Mixed 


Life and Fire . . 


Special Acts of Parliament. 


« 


Northern (late Noi^th of 










Scotland) 


Mixed 


Life and Fire . . 


Special Act of Incorporation. 


« 


Westminster and General. 


Mixed 


Life and Fire . . 


Deed of Settlement. 


1837 


General (late Dissenters 










and General) 


Mixed 


Life and Fire . . 


Special Acts, 3 Vic, c 20. 


(i 


Scottish Provident . . 


Mutual 


Life 


Special Act of Incorporation. 


« 


International (late Na- 










tional Loan Fund ) 


Mixed 


Life 


Regis, under 7 and 8 Vic, c. 110. 


183S 


Albert (late Freemasons) . . 


Mixed 


Life 


Joint-stock Company's Act. 


li 


City of Glasgow .. 


Mixed 


Life 


Special Act, 5 & 6 Vic, c 65. 


" 


Life Associa't. of Scotland 










(late Edinb. and Glasg.) Mixed 


Life 


Royal Charter and Special Act. 


1839 


English and Scottish Law. 


Mixed 


Life 


Special Act. 


1840 


Church of England 


Mixed 


Life and Fire . . 


Special Act, 4 and 5 Vic, c 92. 


" 


Provident Clerks .. 


Mutual 


Life and Sick . . 


Special Act. 


" 


Reliance 


Mutual 


Life 


Deed of Settlement. 


,l 


Royal Farmers 


Mixed 


Life and Fire . . 


Special Act. 


" 


United King. Temperance . 


Mutual 


Life and Fire . . 


Deeds of Settlement. 


1841 


Scottish National (late 










National Insur. of Scot.) 


Mixed 


Life and Fire . . 


U (( 


" 


Wesley an and Gen. Prov. 


Friendly .. 


Life 


Friendly Society's Act. 


1843 


Preserver 


Proprietary 


Life and Fire . . 


One Proprietor only. 


11 


Star 


Mixed 


Life 


Special Act. 


1844 


British Mutual 


Mutual 


Life 


Deed of Settlement. 


'« 


Equity and Law . . 


Mixed 


Life 


" " 




Great Britain 


Mutual 


Life 


it ii 



FOURTH PERIOD. 



1845 Royal 


Mixed 


Life and Fire . . 


Joint-stock Company's Act. 


1846 London& Provincial Law . 


Mixed 


Life 


" .Sovereign 


Mixed 


Life 


" " 


" Brighton&Suss.Mut. Prov. Mutual 


Life 


Friendly Society's Act. 
Special Act, 15 Vic, c 53. 


1847 British Empire Mutual . . Mutual 
1 1 


Life 



68 



TABLES. 
FOURTH PEEIOD continued. 



Est. 


Present and Original Names 
of Offices. 


Principles. 


Nature of 
Business. 


Powers under which they net. 


1848 


Gresham 

Prudential (late British 


Mixed 


Life . . . . Joint-stock Company's Act. 






Pnid. and Consolidated, 












formerly British Prud., 












originally Prud. Mutual). 


Mixed 


Life 


ii it 




1850 


Law Property 


Mixed 


Life and Titles. 


u i. 




1852 


Lancashire 


Mixed 


Life and Fire . . 


n n 






Marine and General 


Mutual 


Life& Marine.. 


n it 




" 


Provincial ( Welsh) 


Mixed 


Life and Fire . . 


n n 




1853 


Briton, Medical & General 












(late Briton) 


Mixed . . 


Life 


u n 




" 


European (late People's 












Provident) 


Mixed 


Life 


ti n 




u 


Emperor 


Mixed 


Life and Fire . . 


n n 




1854 


British Equitable .. 


Mixed 


Life 


n n 




" 


Law Union 


Mixed 


Life and Fire . . 


u n 




" 


United Brothers . . 


Mutual 


Life and Sick . . 


n n 




ii 


National Industrial (late 












Operatives) 


Proprietary 


Life and Loan.. 


Incorp. under 7 & 8 Vic. c. 


110. 


1855 


Midland Counties 


Mixed 


Life and Fire . . 


Joint-stock Company's Act. 




" 


Whittington 


Mixed 


Life 


ii ii 




" 


National Mutual (late 












United Traders) 


Mutual 


Life 


Friendly Society's Act. 




1856 


Mut. Prov. Alliance (late 












Christian Mut. Prov.) . . 


Mutual 


Life and Sick . . 


ii ii 




1857 


Queen 


Mixed 


Life 


Deed of Settlement. 




1860 


Norwich Provident 




Life 






" 


Victoria Benefit 


Mutual 


Life and Sick . . 


Friendly Society's Act. 




1861 


Western Counties & Lond. 


Mutual 


Life 


Incorp. under 7 & 8 Vic, c 


110. 



FIFTH PEEIOD. 



1 

1862 


Commercial Union 


Mixed 


Life, Fire, Mar. 


Deed of Settlement. 




" 


London and Lancashire . . 


Mixed 


Life and Fire . . 


Companies' Act, 1862. 


Limited. 


" 


Southampton Mutual 


Mutual 


Life 


ii ii 




1863 


Hercules 


Mixed 


Life and Fire . . 


ii ii 




" 


National Union .. 


Mixed 


Life 




ii ii 




1864 


Albion . . . . . . 


Mixed 


Life 




u it 




" 


Life Investment .. '.. 


Mixed 


Life, Mort. An 




ii i« 




" 


London and Southwark . . 


Mixed 


Life and Fire 




ti it 




" 


Sceptre 


Mixed 


Life 




it it 




1865 


Birmingham Alliance .'. 
General Provident 


Mixed 


Life, Ace Gua 




tt it 




" 


Mixed 


Life 




it it 




" 


London and Northern . . 


Mixed 


Life and Fire 




ti it 




" 


National Guardian 


Mixed 


Life and Loan 




it it 




ii 


Provincial Union 


Mixed 


Life and Sick 




ii ti 




1866 


British Workman 


Mutual 


Life and End 


Friendly Society's Act. 




" 


Imperial Union .. 


Mixed 


Life, Ann. End . 


Companies' Act, 1862. 


Limited. 


" 


Industrial 


Mixed 


Life, End. Ann. 


ii u 




ii 


London and Manchester . . 


Mixed 


Life, Fire, Ace. 


ii ti 




14 


Manchester Provident 


Mixed 


Life, Fire, Ann . 


ii tt 




" 


Northern Patriotic 


Mixed 


Life, End. Sick. 


it ti 




" 


Planet 


Mixed 


Life, Fire, Ann . 


tt tt 




" 


Prosperous 


Mixed 


Life, Sick. End. 


tt ti 




" 


United English & Scottish . 


Mixed 


Life, Ann. Rev. 


it ti 




" 


United Kingdom .. 
Universal Ins. Loan and 


Mixed 


Life, Ann. Gua. 


it it 




" 












Investment 


Mixed 


Life, Fire, Mar. 


it it 




" 


Scottish Imperial .. 


Mixed 


Life, Fire, Ann . 


it ii 




ii 


Sheffield and Lincoln 


Mutual 


Life, Sick. End. 


Friendly Society's Act. 





These Tables must be understood to apply to X.its Offices only ; Fire being named where both branches are In- 
cluded in the same deed. Many of the Life Offices are worked with Fire Offices of the same name, but otherwise 
distinct. 

The dates in all cases relate to the time when Life business was actually commenced ; several of the Offices car- 
ried on the Fire for nearly a century before they took up Life business. 

The Tables also include some few Friendly Societies, which, from their extensive ramifications and mode of con- 
ducting business, are virtually industrial Life Assurance Societies, 



TABLES. 



69 



TABLE OF LIFE ASSURANCE OFFICES WHICH HAVE CEASED 
TO EXIST SINCE 1844, AND WHAT BECAME OF THEM. 









When 




Names of Offices. 


When 
Founded. 


Principles. 


ceased 
operations 


Destiny. 


Absolute Security 


1352 


Mixed 


1852 


A swindle. 


Absolute 


1856 




1857 


Transferred to City of London, 
afterwards itself absorbed. 


Accumulative 


1854 


Proprietary 


1854 


Trans, to Anglo-Australian, af- 
terwards itself absorbed. 


Achilles, No. 1 


1841 




1844 


Trans, to Great Brit. Mutual. 


Achilles, No. 2 


1853 


Mixed 


1858 


Transferred to City of London, 
afterwards itself absorbed. 


Adamant 


1852 




1852 




Age 


1851 


Mixed 


1856 


Transferred to Engineers, after- 
wards itself absorbed. 


Agriculturist 


1845 


Mixed 


1848 


Transferred to Norwich Union. 


JSgis 


1849 


Mixed 


1854 


Transferred to Mitre, afterwards 
itself absorbed. 


Albion 


1805 


Mixed 


1858 


Transferred to Eagle. 


Alfred 


1839 


Mixed 


1858 


Transferred to Eagle. 


Amazon 


1853 


Mixed 


1854 


Winding up in Chancery. 


Anchor 


1852 


Mixed 


1857 


Transferred to Bank of London, 
afterwards itself absorbed. 


Anglo- Australian 


1853 


Mixed 


1858 


Trans, to British Provident, af- 
terwards itself absorbed. 


Annual Bonus Life Ass. 


1851 




1852 


A swindle. 




1853 


Mixed 


1857 


Became a total wreck. 


Asylum 


1824 




1857 


Transferred to London Assur- 
ance Corporation. 


Athenaeum 


1851 


Mixed 


1856 


Transferred to People's Provi- 
dent, now called European. 










Austral., Col., and General . . 


1839 


Mixed 


1852 


Trans, to Liverpool and Lond. 


Bank of London 


1856 


Mixed 


1858 


Transferred to Albert. 


Bank of Deposit, alias Natl. 










Assur. Invest., which see .. 










Beacon 


1853 


Mixed 


1856 


Transferred to Albert. 


Beneficent Life Assurance 


1852 




1852 


A swindle. 


Birkbeck 


1852 


Mixed 


1857 


Transferred to Home Counties, 
afterwards itself absorbed. 


Bon Accord 


1845 


Proprietary- 


1849 


Transferred to Northern. 


Brewers and Distillers 


1851 


Proprietary 


1853 


Dissolved. 


British 


1847 


Mixed 


1853 


Transferred to Lancashire. 


British Empire 


1839 


Mixed 


1844 


Transferred to Monarch, after- 
wards itself absorbed. 


Birmingham and Midland . . 


1862 


Mixed 


1865 


Trans, to Birmingham Alliance. 


British Isles 


1860 




^ 1860 


Died out. 


Britannia Proprietary 
Ditto, Mutual 


1837 

1837 


Proprietary 
Mutual 


j-1865 


Trans, to Briton Med. and Gen. 


British Commercial .. 


1820 


Mixed 


' 1860 


Transferred to British Nation, 
afterwards itself absorbed. 


British Exchequer 


1856 


Mixed 


1858 


Transferred to Brit. For.& Col., 
afterwards itself absorbed. 


British & Foreign Reliance . . 


1855 


Mixed 


1859 


Transferred to Law Property. 


British Shield 


1857 




1857 


Trans, to Lon. & Provin. Prov., 
afterwards itself absorbed. 


British, Foreign, & Colonial. 


1857 




1859 


Transferred to Consols, after- 
wards itself absorbed. 


British Protecto?' 


1851 


Mixed 


1859 


Transferred to Sovereign. 


British Provident 


1850 


Mixed 


1859 


Transferred to British Nation, 
afterwards itself absorbed. 


British Industry 


1852 


Mixed 


1860 


Trans, to British Prudential. 


British Union 


1863 


Mixed 


1865 


Transferred to Empire, after- 
wards itself absorbed. 


British Nation 


1854 


Mixed 


1865 


Transferred to European. 


British Amicable 


1857 




1857 


Transferred to General. 


British Standard 


1864 


Mixed 


1866 




Brunswick 


1855 


Mixed 


1857 


Transferred to Briton. 


Cambrian and Universal 


1849 


Mixed 


1857 


Transferred to Mitre, afterwards 

itself absorbed. 
Died out. 


Candidate 


1845 


Proprietary 


1847 




1846 


Mixed 


1857 


Transferred to Phoenix Life, af- 
terwards itself absorbed. 










Caxton 


1854 


Proprietary 


1856 


Winding up in Chancery. 


City 


1862 


Proprietary 


1866 


Transferred to Sovereign. 


City and County 


1844 


Mixed 


1866 


Transferred to Empire, after- 
wards itself absorbed. 



70 



TABLES. 



Names of Offices. 


When 

Founded 


Principles. 


When 

ceased Destiny. 
operations 


City of London 


1844 


Mixed 


1859 


Transferred to Eagle. 


City of London and Gen. . . 


1863 




1863 




Civil Service 


1854 


Mixed 


1854 


Dissolved. A swindle. 


Clarence 


1854 




1854 


Trans, to United Homoeopathic, 
afterwards itself absorbed. 


Commercial (Scotch) .. 


1840 


Proprietary 


1846 


Transferred to Standard. 


Commercial, No. 4 


1850 


Mixed 


1858 


Trans, to Eng. Widows' 1 Fund, 
afterwards itself absorbed. 


Colonial 


1846 


Mixed 


1866 


Transferred to Standard. 


Colonial and General 


1846 


Mixed 


1847 


Transferred to Standard. 


Commercial and General 


1841 


Mixed 


1853 


Transferred to London Assur- 
ance Corporation. 


Commonivealth 


1853 


Proprietary 


1854 


Dissolved. 


Confident 


1855 


Mixed 


1864 


Amalg. with Gen. Prov., No. 1, 
afterwards itself absorbed. 


Constitution 


1856 


Mixed 


1857 


Dissolved by priw arrangement. 
Trans, to Provident Clerks. 


Consols 


1859 




1862 


Consolidated 


1846 


Mixed 


1865 


Amalg. with Brit. Prudential. 


Cosmopolitan 


1855 


Mixed 


1856 


Winding up in Chancery. 


County (Herts.) 


1849 


Mixed 


1853 


Transferred to < 'ity of London, 
afterwards itself absorbed. 


County 


1864 




1865 


Transferred to Imperial Union. 


Counties Union 


1852 


Mixed 


1853 


Winding up in Chancery. 


Defender 


1846 


Mixed 


1858 


Trans, to Leeds and Yorkshire, 


Depos. Assur. & Disc. Hank, 








afterwards itself absorbed. 


alias Life Assur. Treasury, 










which see. 










Deposit Assurance (Aberd.) . . 


1846 




1848 




Deposit and General .. 


1852 


Mixed . . 


1856 


Transferred to City of London, 
afterwards itself absorbed. 


Diadem 


1854 


Proprietary 


1857 


Trans, to British Provident, 
afterwards itself absorbed. 


Durham and North .. 


1854 


Mixed 


1856 


Transferred to Bank of London, 
afterwards itself absorbed. 


East of England 


1849 


Mutual 


1858 


Transferred to Reliance. 


East of Scotland 


1845 


Proprietary 


1852 


Transferred to Colonial, after- 
wards itself absorbed. 


Eclipse 


1854 


Proprietary 


1856 


Shut up. A failure. 


Economy 


1845 


Mutual 


1845 


A French Office. 


Empire 


1854 


Mixed 


1857 


Trans, to Family Endowment, 
afterwards itseif absorbed. 


Empire 


1865 


Mixed 


1867 


In liquidation. 


English and Foreign .. 


1852 


Mixed 


1857 


Trans, to National Alliance, af- 
terwards itself absorbed. 


English Provident 


1855 


Mixed 


1857 


Transferred to Kent Mutual, af- 
terwards itself absorbed. 


England 


1845 


Proprietary 


1846 


A failure. 


English and Cambrian, after. 










called Commercial, wh. see. 










English Widows' 1 Fund 


1846 


Mixed 


1860 


Transferred to British Nation, 
afterwards itself absorbed. 


English and Irish Church . . 


1853 


Mixed 


1861 


Transferred to British Nation, 
afterwards itself absorbed. 


Engineers Masonic and Gen. 


1847 


Mutual . . 


1858 


Trans, to Eng. & Irish Church, 
afterwards itself absorbed. 


Era 


1852 


Mixed 


1858 


Transferred to Law Property. 


Etonian and General . . 


1847 


Mixed 


1850 


Trans, to Equity and Law. 


Exchange 


1856 


Mixed 


1856 




European, No. 1 


1819 


Mixed 


1858 


Trans. toPeople' 'sProvident, now 

called European. 
A swindle. 


European Alliance Full Pay . . 


1852 




1853 


Excheguer and Railway 
Experience 


1851 


Mixed 


1851 


Dissolved. 


1843 


Mixed 


1850 


Transferred to Standard. 


Fatcon 


1854 


Mixed 


1856 


Transferred to Bank of London, 
afterwards itself absorbed. 


Financial 


1864 


Mixed 


1866 


Transferred to Whittington. 


Friend in Need 


1862 


Mixed 


1866 


Transferred to Empire, after- 


Family Assur., & Sick Fund. 


1861 


Friendly .. 


1853 


wards itself absorbed. 


Family Endowment .. 


1835 


Mixed 


1861 


Transferred to Albert. 


Female Provident 


1855 




1857 




General Indemnity 


1853 


Mixed 


1857 


Transferred to Commercial, af- 


General Provident, No. 1, af- 








terwards itself absorbed. 


terwards called Gen. Prov. 










and Confident 


1862 


Mixed 


1865 


Amalg. with Gen. Prov. (No. 2.) 


General Provincial 


1864 


Mixed 


1867 


Amalg. with Whittington. 



TABLES. 



Names of Offices. 



Gen. Ann. and Life Assur. . , 

Globe 

Glasgow Assurance 
Halifax, Keighley, and Brad 

ford 

Herald 

Home Counties 
Home and Foreign 
Home and Colonial . . 



Hope 
Hope 



When 
Founded 



Householders and General 



Hull and London 
Independent 
India and London 



Indisputable of Scotland 
Industrial and General 



Industrial Life .. 

Justice 

Kent Mutual 
Leeds and Yorkshire . . 
Lie. Victuallers, afterwards 
called Monarch, which see. . 
Legal and Commercial 
Lion of England 

Lombard 

London and County .. 
London, Edinbro\ and Dublin. 
London Mutual 
Lond. and Prov. Joint Stock. . 



London Mercantile 

London and Westminster . 

London and Continental 

London and Provincial Prov 

London and YorksMre 

Life Association of England. . 

Life Assurance Treasury 

London and Westminster 
London Equitable 

London Indisputable .. 
Mariners and General 
Marylebone and General 

Mercantile {Scotch) 

Mentor 

Minerva 

Metropolitan Counties 

Manchester 

Mancliester and London 

Mitre 

Mercantile Provident .. 
Mercantile Professional & Gen. 

Magnet 

Medical, Invalid, and Gen. . . 
Medical, Legal, and Gen. 

Mercantile, Life, and Guar. 
Merchants and Tradesmen . . 



1861 
1803 
1845 

■1845 

1856 
1853 
1852 



1807 
1852 

1852 

1855 

1848 
1846 

1860 
1849 

1852 
1854 
1850 
1824 



1845 
1852 
1854 
1851 
1839 
1849 
1847 

1853 

1839 

1854 

1855 

1858 
1863 
1855 

1863 
1855 

1848 
1843 
1853 

1844 
1848 
1836 
1848 

18*4 
1853 

1846 
1854 
1864 

1854 

1840 

1846 

1858 
1844 



Principles. 



When 

cea.«ed 

operation? 



Mutual 
Mixed 

Proprietary- 
Mixed 
Mixed 
Proprietary 
Mixed 

Mixed 
Mutual 

Mixed 

Mixed 

Proprietary 

Proprietary 

Mixed 
Mixed 



Proprietary 

Mutual 

Mixed 



Proprietary 

Proprietary 

Mixed 

Mixed 

Mutual 

Proprietary 

Mixed 

Mutual 

Mixed 

Mixed 

Mixed 
Mixed 



Mutual 

Mutual 

Proprietary 

Mixed 

Mixed 
Mixed 
Mixed 

Mixed 



Mixed 
Mixed 



Mixed 



Mixed 
Mixed 



Mutual 



1865 
1864 
1848 

1854- 



1857 
1853 
1866 

1844 
1855 

1858 

1857 
1852 
1860 



1854 

1853 

1857 
1861 
1862 



1857 
1852 
1856 
1859 
1846 
1857 
1853 

1855 

1844 



1861 

1862 
1864 
1861 

1865 
1863 

1857 
1847 
1854 

1851 
1855 
1864 
1862 

1846 



1860 
1855 
1865 

1859 



1857 



1860 
1858 



Transferred to Sovereign. 
Amalg. with Liverpool & Lond. 
Trans, to Scottish. Provincial. 
Transferred to Unity, afterwards 

itself absorbed. 
Winding up in Chancery. 
Transferred to Whittington. 
Dissolved. 
Transferred to Northern, the 

marine business excepted. 
Transferred to Imperial. 
Transferred to Mitre, afterwards 

itself absorbed. 
Trans, to Enrt. & Irish Church, 

afterwards itself absorbed, 
Winding up in Chancery. 
Wound up in Chancery. 
Trans, to People's Provident, 

now called European. 
Trans, to Briton, Med. & Gen. 
Trans, to People's Ficvident s 

now called European. 
A swindle. 

Winding up in Chancery. 
Transferred to Albert. 
Transferred to Liverpool&, Lond. 



Transferred to Victoria, after 
[wards itself absorbed 

Never issued a Policy. 

'Winding up in Chancery. 

| Transferred to Liverpool& Lond. 

(Transferred to Eagle. 

Trans, to Legal & Commercial, 
afterwards itself absorbed. 

Transferred to East of England, 
afterwards itself absorbed. 

Transferred to Britannia, after- 
wards itself absorbed. 

Transferred to St. George, after- 
wards itself absorbed. 

Transferred to British Nation, 
afterwards itself absorbed. 

Transferred to Whittington. 

Winding up in Chancery. 

Transferred to Waterloo, after- 
wards itself absorbed. 

j Trans, to British Prudential. 

Transferred to British Nation, 
afterwards itself absorbed. 

Transferred to Eagle. 

Transferred to Eagle. 

Trans, to English and Foreign, 
afterwards itself absorbed. 

Trans, to Life Assoc, of Scot. 

Transferred to Eagle. 

Transferred to Standard. 

Transferred to Western, after- 
wards itself absorbed. 

Transferred to Pelican. 

Transferred to Western, after- 
wards itself absorbed. 

Transferred to Law Union. 



Trans, to National Standard, 
afterwards itself absorbed. 

Transferred to Waterloo, after- 
wards itself absorbed. 

Transferred to Albert. 

Transferred to New Equitable, 
afterwards itself absorbed. 

Winding up in Chancery. 

Transferred to Bank of London, 
afterwards itself absorbed. 



72 



TABLES. 





I 




When 




Names of Offices. 


When 

| Founded. 

I 


Principles. . 


ceased 
operations 


Destiny. 


Monarch 


1835 


Mixed 


1857 


Trans, to Liverpool & London. 


Morayshire 


1840 


Proprietary 


1856 


Transferred to North British. 


Mutual Accumulation 


1837 




1847 


Transferred to City of Glasgow. 


National Church 


1845 


Proprietary. 


1845 


Died out. 


National Friendly 


1846 


Friendiy .. 


1853 


Transferred to Protestant, after- 
wards itself absorbed. 


National Guardian. 


1850 


Mixed 


1857 


Transferred to Albert. 


National Alliance 


1855 


Mixed 


1859 


Transferred to Sovereign. 


National Mercantile .. 


1837 


Mutual 


1866 


Transferred to Eagle. 


National Provincial, after- 










wards called Bank of Lon- 










don, which see. 










Nelson 


1854 




1855 


Winding up in Chancery. 


Nerv Alliance, afterwards 










called British and Foreign 










Reliance, which see. 










National Assurance Invest. . . 


1844 


Mutual 


1861 


Transferred to Waterloo, after- 
wards itself absorbed. 


National Standard 


1865 




1866 


Transferred to Financial. 


National Weekly 


1852 




1852 




New Equitable 


1851 


Mixed 


1862 


Transferred to Briton. 


New National 


1854 


Mixed 


1865 


Trans, to National Guardian. 


New Protector, after, called 










Brit. Protector, which see. 










North of England 


1844 


Mixed 


1858 


Trans, to Liverpool and Lond. 


Newcastle on Tyne 


1783 




1860 


Transferred to North British. 


Oak 


1851 


Mutual 


1854 


Trans, to London and County, 
afterwards itself absorbed. 


Observer 


1855 


Mixed 


1857 


Transferred to City of London, 
afterwards itself absorbed. 


Official and General 


1853 


Mixed 


1855 


Trans, to National Guardian, 
afterwards itself absorbed. 


Palladium 


1824 


Mixed 


1856 


Transferred to Eagle. 


Parental 


1854 


Proprietary 


1854 


Winding up in Chancery. 


Pecuniary Aid 


1852 




1852 




People's 


1847 


Mixed 


1851 


Transferred to City of London, 
afterwards itself absorbed. 


Phmnix 


1848 


Mixed 


1860 


Transferred to British Nation, 
afterwards itself absorbed. 


Professional 


1846 


Mixed 


1861 


Transferred to European. 


Promoter 


1826 


Mixed 


1862 


Transferred to Guardian. 


Practicable 


1845 


Proprietary 


1846 


Died out. 


Preceptors and General 


1848 


Proprietary 


1849 


Transferred to Albert. 


Preston & North Lancashire. . 


1845 


Proprietary 


1848 


Transferred to Sun. 


Prince of Wales 


1851 


Mixed 


1857 


Trans, to People's Provident, 
now called European. 


Protector 


1835 


Mixed 


1848 


Transferred to Eagle. 


Protestant 


1852 


Mixed 


1855 


Dissolved in Chancery. 


Public 


1859 


Mixed 


1862 


Trans, to City, afterw. itself abs. 


Reciprocal 


1851 


Mixed 


1852 


Dissolved. A swindle. 


Railway and General Provi- 










dent, afterwards Universal 










Provident, which see. 










Royal Naval and Military . . 


1837 


Mixed . . 


1866 


Transferred to European. 


Saxon 


1854 


Mixed 


1856 


Trans, to Era, afterw. itself abs. 


Safety 


1854 


Mixed 


1859 


Transferred to Sovereign. 


Sceptre 


1851 


Proprietary 


1852 


Dissolved. 


Sceptre of England 


1852 




1852 




Security 


1854 


Mixed 


1856 


Winding up in Chancery. 


Schoolmasters and General . . 


1851 


Mutual 


1859 


Trans, to Church of England. 


Scottish Freemasons .. 


1844 


Mutual 


1848 


Transferred to Northern. 


Scottish Friendly 


1863 


Mutual 


1867 


Transferred to Crown. 


Scottish Industrial 


1863 


Mutual 


1866 


Transferred to Empire, after- 
wards itself absorbed. 


Scottish Life and Guarantee . . 


1844 


Mixed .. 


1848 


Trans, to Mercantile (Scotch), 
afterwards itself absorbed. 


Sea, Fire, Life 


1849 


Proprietary 


1850 


Dissolved. A swindle. 


Self Reliance 


1853 


Propi*ietary 


1854 


Died out. 


Sheffield, Rotherham, & Ches- 










terfield, afterwards called 










North of Eng., which see. 










South of England 


1841 


Proprietary 


1843 


Transferred to Britannia, after- 
wards itself absorbed. 


St. George 


1854 


Mixed .. 


1861 


Trans, to Metro. Counties &Gen., 
afterwards itself absorbed. 



TABLES. 



73 



Names of Offices. 



Solicitors and General 

Standard of England, after- 
wards called Britannia Mu- 
tual, which see. 

Suffolk and Gen. Coun. Amic. 

Times 

Tontine .. 

Trafalgar 



1846 Mixed 



1834 
1849 
1846 

1851 



United Counties 

United Deposit . . 

United Life and Guarantee . . j 

United Homoeopathic, after- 
wards called English Provi- 1 
dent, which see. 

United Mutual Mining . . j 

United Service .. 

United Traders 
United Kingdom 
United Orders .. 
Unity General .. 

Universal Provident . . 

Universal Life and Eire 
Victoiia Legal and Com. 
Volunteer Service and Gen. 
Waterloo .. 



Mixed 
Proprietary 



Mixed 



1864 Mixed 
1845 Proprietary 
1849 Mixed 



Westminster 
Western .. 
Western {Scotch) 

Widoivs'' National 

World 

World 



York and London 

Yorksh.. Lancsh., Mid. Coun. 



1849 

1850 

1848 
1834 
1855 
1854 



1852 
1838 
1861 
1851 

1853 

1792 

1842 
1844 

1845 
1854 
1858 

1834 
1862 



When 

censed 

operation: 



Mutual 

Mixed 

Friendly . 
Mixed 
Friendly . 
Mixed 

Provident. 



Mixed 
Mixed 
Mixed 

Mixed 

Mixed 
Mixed 



Mixed 

Proprietary 
Friendly . 



1866 



1850 

1S57 
1849 

1854 

1867 
1853 
1854 



1857 

1857 

1856 
1862 
1856 
1862 

1855 

1853 
1865 
1865 
1862 

1863 

1863 
1865 
1846 

1846 
1855 
1863 

1844 
1865 



Transferred to Eagle. 



Transferred to Alliance. 

Transferred to Albert. 

Trans, to Engineers & Masonic, 

afterwards itself absorbed. 
Transferred to Unity General, 

afterwards itself absorbed. 
In liquidation. 

Transferred to ScottishNational. 
Trans, to PeopWs Provident, 

now called European. 



Trans, to People's Provident, 

now called European. 
Trans, to PeopWs Provident, 

now called European. 
Dissolved. 
Transferred to North British. 

Transferred to Briton, Med., 

and General. 
Trans, to Engineers & Masonic, 

afterwards itself absorbed. 
A swindle. 

Transferred to Standard. 
Transferred to North British. 
Transferred to British Nation, 

afterwards itself absorbed. 
Transferred to British Nation, 

afterwards itself absorbed. 
Transferred to Guardian. 
Transferred to Albert. 
Transferred to North of Scot., 

now called Northern. 



Transferred to City & County. 

afterwards itself absorbed. 
Transferred to Standard. 
Trans, to Provincial Union. 



LIFE OFFICES WHICH HAVE CHANGED THEIR NAMES * 



When Es 

taolislied. 


Former Name. 


Name as altered. 


When 
Chiinsed. 


1825 

1845 
1837 
1839 
1850 
1838 
1825 
1835 
1843 
1838 
1851 
1855 
1851 
1836 
1854 
1853 

1848 

1853 
1845 
1839 
1855 
1855 


Aberdeen 

Brit. Prudential, see Prud. Mutual.. 
Christian Mutual Provident .. 
Dissenters and General 
Edinburgh and Glasgow 
English and Cambrian 

Freemasons 

Life Insurance Company of Scotland. 

Licensed Victuallers 

National Insurance of Scotland 

National Loan Fund 

National Provincial 

New Alliance 

New Protector 

North of Scotland 

Operatives 

PeopWs Provident 

Prudential Mutual .. .. < 

Railway and General Provident 
Sheffield, Botherliam, and Chesterfield . 

Stand trd of England 

United HornmopathiG 

United Traders 


Scottish Provincial 

Mutual Provident Alliance 

General 

Life Association of Scotland .. 

Commercial 

Albert 

Standard 

Monarch 

Scottish National 

International 

Bank of London 

British and Foreign Beliance 

British Protector 

Northern 

National Industrial 

European 

British Prudential 

" and Consolidated.. 

Prudential 

Universal Provident 

North of England 

BHtannia Mutual 

English Provident 

Ndtional Mutual 


1852 

1858 
1849 
1841 
1856 
1850 
1832 
1851 
1860 
1855 
1856 
1857 
1853 
1848 
1855 
1859 
1860 
1865 
1867 
1854 
1847 
1839 
1856 
1859 



* It has been considered unnecessary to include in this list offices which have simply added to their original names, 
those alterations being noticed in the foregoing Tables. 



DIVISION II. 

POPULAR NOTES 

ON THE LAWS OF MORTALITY, 

AS BEARING UPON LIFE ASSURANCE ; 

ALSO 

ON POPULATION AND LONGEVITY. 

CHAPTER I. 

"Mortality," says Dr. Southwood Smith — and we need no 
greater authority — " is subject to a law the operation of which is 
as regular as that of gravitation." While Mr. Babbage, who 
looked at the subject more particularly in its bearings upon Life 
Assurance, says, u Nothing is more proverbially uncertain than 
the duration of human life, when the maxim is applied to an 
individual; but there are few things less subject to fluctuation 
than the average duration of life in a multitude of individuals." 
Do we want an illustration? Take 5,000 persons in the prime of 
life, and note their deaths. They will be found in something like 
the following proportions : In the first ten years 600 ; in the 
second ten, 750; in the next, 850; and so on, progressively 
increasing at each period, until the whole have passed away. 
The average duration of life in Great Britain, at the present 
time, is 41 years — ranging from 26 (formerly only 24) in Liver- 
pool, and 37 in the metropolis, up to 45 in Surrey. In France 
the duration is 40 years; in Sweden, 39; and, in other countries, 
progressively downwards, until the average throughout the 
world is found to be only 33 years. In Rome, thirteen hundred 
years ago, the average was much the same as in England now. 
Amongst the nobility and gentry of England, the " expectation 
of life," at the age of 84, is found to be four years. Amongst 
the poor fishermen of Ostend it is precisely the same. M. Depar- 
cieux, who wrote a century ago, established the expectation of 
life at that time in France, at the same age, to have been 3|- 
years. Halley, whose observations went back to the seventeenth 
century, found the expectation to be slightly, but not much, less. 
We know, however, that the duration of life, at all ages, has 
increased considerably during the past century. And we have 
the authority of Dr. Southwood Smith, for stating that while the 
mortality of all the other epochs of life is affected by country, by 



CAUSES OF DEATH IN ROYAL CIRCLES. 



75 



station, and by a multitude of influences arising out of these and 
similar circumstances, the concurrent evidence of all observation 
shows that at this, and the like advanced ages, the mean term of 
existence is nearly the same in all countries, at all periods, and 
amongst all classes of society. 

Professor de Morgan once remarked that before an individual 
was born it was 20,000 to 1 against his dying at a given age of 
a given malady ; and this still is, and ever must remain, true. 
The recognition of the fact, that all must die, constitutes the 
boundary of our knowledge, as to the individual catastrophe ; 
and it is wisely ordained that it should be so. But scientific in- 
vestigation, aided by and based upon well-founded records of the 
deaths of several centuries, has led to the discovery of a series 
of facts connected not only with the masses of the people, but 
with the various sections of the mass, which not only astonish us 
by the minuteness of their details, but astound us with their mar- 
vellous accuracy. By such means it becomes known (on the au- 
thority of Dr. Guy and Mr. Neison), that a clergyman who has 
attained 30 years of age, has an expectation of 35 more ; that an 
agriculturist of the same age has an expectation of 40 years ; 
while a sovereign can claim no more than 22 or 23 years. This 
last fact calls to our mind an observation of the learned Hufeland 
(of whom we shall hear more as this chapter proceeds), that while 
royalty confers upon its possessors all the advantages and enjoy- 
ments of the world in the highest degree, it does not confer on 
them that which is to be esteemed as greater than all — the bless- 
ings of lonjr life. 





Age 


Cause or Manner of 




Age 


Cause or Manner of 


Names. 


at 
death. 


Death. 


Names. 


at 
death. 


Death. 


William I. . 


60 


Rupture and fever. 


Henry VII . . 


52 


Consumption. 


William II. 


43 


Shot by an arrow. 


Henry VIII.. 


55 


Ulcerated leg. 


Henry I 


67 


Surfeit of lampreys. 


Edward VI.. 


15 


Consumption. 


Stephen. .. . 


49 


The piles. 


Mary 


42 


Small pox. 


Henry II. . . 


55 


Grief. 


Elizabeth . . . 


69 


Course of nature. 


Richard I . . 


43 


Killed by an arrow. 


James I 


58 


Ague. 


John 


49 


Poison, or Grief. 


Charles I. . . . 


48 


Beheaded. 


Henry III. . 


65 


Age. 


Charles II. . . 


54 


Apoplexy. 


Edward I . . 


67 


Diarrhoea. 


James II. ... 


67 


Course of nature. 


Edward II.. 


43 


Murdered. 


Mary II 


32 


Small pox. 


Edward III. 


65 


Course of nature. 


William III. 


52 


Eall from his horse. 


Richard II.. 


33 


Consumption. 


Anne 


49 


Apoplexy. 


Henry IV . . 


46 


Apoplexy. 


George I . 


67 


Paralytic attack. 


Henry V. . . 


33 


Pleurisy. 


George II. . . 


77 


Died suddenly. 


Henry VI . . 


49 


Murdered. 


George III . . 


82 


Course of nature. 


Edward IV. 
Edward V.. 


41 
12 


Ague. 
Smothered. 


George IV. Y 


68] 


Bursting of a blood 

vessel. 


Richard III. 


42 


Killed in battle. 


William IV . 


72 


Course of nature. 



If it were necessary to furnish any instances of the individual 



76 LENGTH OF REIGN OF EUROPEAN MONARCHS. 

uncertainty of life, and the thousand ills which human flesh is 
heir to, beyond those which, at a single thought, recur to our 
mind, Ave know of nothing better suited to the purpose than a 
chronological list of the Kings and Queens of England, from Wil- 
liam the Conqueror downwards. And as it will serve to illus- 
trate the deductions to be drawn even from the records of one 
class of individuals, where they extend over a sufficient period of 
time, we have given it, premising that the ages and causes of death 
are stated as accurately as possible on a hasty reference, and 
scanty materials at command. 

The perusal of the early portion of this list carries back the 
mind to a state of things happily long since passed away. In 
those times a crowned head was little else than an index to a 
sorrowing heart. Look carefully and see that six of the entire 
number have died in the course of nature, or of old age — only one 
of the latter ! Only one out of every five have died from what may 
here be called " natural causes." Three only have exceeded 70 ; 
and 67 seems an age fatal to royalty. Observers of the law of 
mortality, look at such a table, not with regard to individual cases, 
but as a whole. They find that the average " expectation" of our 
English sovereigns, at the time of their accession to the throne, 
was 33 ; they should, therefore, have died at the average age of 
63 ; instead of which they have averaged only 52 years — the pen- 
alty of their royalty being the curtailment of their existence by a 
period of 11 years ! With such facts before us, we need scarcely 
invoke the "immortal bard " to 

" Tell sad stories of the death of kings : — 
How some have been deposed, some slain in war, 
Some haunted by the ghosts they have deposed. 
Some poison'd by their wives ; some sleeping kill'd ; 
All murder'd : — For within the hollow crown 
That rounds the mortal temples of a king, 
Keeps Death his court ; and there the antic sits 
Scoffing his state, and grinning at his pomp." 

Richard II. 

Happily, the causes which have brought about such results no 
more exist. Sovereigns no longer lead their armies to the battle- 
field, or mix themselves up in individual contentions and party 
strife. They are content to remain at home, secure in the hearts 
and affections of their subjects. Hence a great risk is removed, 
and life proportionately prolonged. It is found that the lives of 
royalty are infinitely safer in popular than in despotic, in civilized 
than in barbarous, states. In Germany the reigns of thirty-eight 
emperors lasted, on an average, nineteen years ; in Sweden, forty- 
one kings reigned eighteen years each; in Russia, fifty czars 
reigned, on an average, fifteen years; while in England, (bud as 
things have been,) the average is twenty-two and a-half years.* 
Taking all Europe, Newton was not far wrong when he stated 

* Dr. Farr in M'Culloch's British Empire. 



DURATION OF LIFE AFFECTED BY OCCUPATION. 77 

that " Kings reign, one with another, about eighteen or twenty 
years." 

Another illustration occurs to us, even, in some respects, of a 
more remarkable character. It is that of great Statesmen. They 
indeed have an average of about fifty-six years ; but to trace their 
sad ends is to open up a perfect " chapter of horrors." We avail 
ourselves of a record already presented to the world : " Chatham 
fell fighting. His still greater son sank under the news of Aus- 
terlitz. Percival was assassinated on the threshold of the House, 
his hand filled with papers, and a speech upon his tongue. Cas- 
tlereagh's end was still more awful. Romilly, too, w T as a States- 
man as well as a lawyer. Lord Liverpool was struck down in 
the midst of his duties. Canning fell suddenly while soaring in 
the pride of his might. Huskisson perished terribly in the midst 
of his former colleagues. Bentinck aspired to be a Statesman, 
and died in full health without a moment's warning. Sir Robert 
Peel (greater than all) died simply by a fall from his horse.* 
And, still more recently, the Earl Powis was accidentally shot by 
his own son. Such have been the incidents ' on the bloodless 
field of Statesmanship ;' while our greatest Generals have lived 
hale and hearty, ' the heroes of a hundred fights,' to ' a good old 
age !' " 

The effect of "occupation" upon the duration of life has of late 
years engaged considerable attention ; and although it is of course 
impossible to account for such fatalities as have befallen the class 
just referred to, a large mass of useful information has been ob- 
tained ; and from time to time this will be extended and improved 
upon. It is to be seen that this influence becomes more marked 
as the observations extend to the " industrious classes." Dr. Farr, 
to whom this country is much indebted for the zeal and talent he 
has bestowed on all matters connected with the laws of health 
and sanitary progress, has given us (in the 14th report of the 
Registrar-General), the result of his experience in this direction. 
Of twelve classes of persons observed upon, viz. : tailors, shoe- 
makers, farmers and graziers, carpenters and joiners, butchers, 
persons engaged in wool, cotton, and silk manufactures, bakers 
and confectioners, inn and hotel keepers, grocers, miners, labor- 
ers, &e. (agricultural and otherwise) and blacksmiths, it was 
found that farmers were the longest livers. The proportions of 
deaths amongst them may be contrasted with the proportions of 
deaths amongst laborers at the following ages : — 



Ages. 


35 to 45 


45 " 


55 


55 " 


65 


65 " 


; 75 


75 ' 


: 85 


85 " 


95 



Farmers, deaths 
per 1000. 


Laborers, deaths 
per 1000. 


Difference. 


9 




13 .. 


4 


12 




17 .. 


5 


25 


m . 


29 .. 


4 


55 


. . 


68 .. 


.. 13 


. . 148 


. . 


174 .. 


.. 26 


. . 324 




418 .. 


.. 94 



* The Times, July, 1850, on the death of Sir R. Peel. 



18 MORTALITY OF INN-KEEPERS. 

The advantages in respect of health of the farmer over the la- 
borer (remarks Dr. Farr), are considerable at every age after 
thirty-five; but, singularly enough, the mortality of the young 
farmers of the age twenty-five to thirty-five, is rather higher than 
the mortality of the young laborers of the same ages. The labo- 
rers constitute nearly one-fourth part of the male population of 
England ; and their mortality is at nearly the same rate as that 
of the whole population, except in the very advanced ages. 

The four classes which, on the whole, experience the heaviest 
rates of mortality in this kingdom are miners, bakers, butchers, and 
inn and beer-shop keepers.* Thus at the age of 45-55 out of every 
1,000 farmers, twelve died; of 1,000 shoemakers, fifteen died; 
of 1,000 weavers and others employed in the manufacture of cot- 
ton, silk, and wool, fifteen died ; out of an equal number of grocers, 
sixteen died ; of blacksmiths, seventeen died ; of carpenters, seven- 
teen died; of tailors, seventeen died; of laborers, seventeen died ; 
of miners, twenty died ; of bakers, twenty-one died ; of batchers, 
twenty-three died ; of inn and beer-shop keepers, twenty-eight 
died — the mortality at that age among the whole population of 
England being at the rate of 18 in 1,000. 

At every period of life, the mortality of the inn and beer-shop 
keepers, (of whom there were 55,315 in the kingdom in 1851) is 
in excess of the mortality of all the other classes except the but- 
chers, at the age of 56-65, who died at the rate of 41 in 1,000; 
while the rate among the inn and beer-shop keepers of the same 
age was 39 in 1,000 ; the rate among the whole population being 
30. The causes of this unusually heavy mortality, says Dr. Farr, 
deserve careful and extensive investigation. Many highly respect- 
able men of the class lead regular lives, and are of steady habits; 
but others, exposed by their business to unusual temptations, live 
intemperately, and enjoy less quiet at night than the rest of the 
community. They are exposed also to zymotic diseases (fevers, 
&c.) by intercourse with large numbers of people. 

The diseases to which various trades are subjected, long since 
commanded some attention. As far back as 1*705 a book was 
published, the title of which tells its own story :• — 

" A Treatise of the Diseases of Tradesmen, shewing the various influence 
of particular trades upon the state of health ; with the best methods to avoid 
or correct it, and useful hints proper to be minded, in regulating the cure of 
all Diseases incident to Tradesmen, written in Latin by Berm, Ramazzini, Pro- 
fessor of Physic at Padua, and now done into English, 1705." 

In a work entitled Practical Observations on the Diseases of 
the Cornish Miners, by W. W. Taylor, Esq., M.R.C.S.E., we find 
the following: — 

" The miner is a short-lived man, and for this there are many obvious causes, 
in addition to hereditary diseases : the close places in which he has frequently 

* The effect of drunkenness on the duration of life has heen ably exemplified in the writ* 
ings of Mr. Francis Q. P. Neison. 



DIVISIONS OF LIFE. 79 

to work, inhaling the noxious air, the various cold draughts he must encoun- 
ter at those times, when all the pores of the skin are open from perspiration, 
and, above all, the length of ladders he may ham to climb, and, to add to this, 
young men are very fond of racing up the ladders, striving who shall first 
reach the surface, a foolish pastime, and too frequently ends in incurable dis- 
ease of the heart or lungs. From forty to forty-five is what may be called the 
critical period of a miner's life — if he passes the latter successfully he may 
probably live many years," &c. 

Independent of external causes, there are natural laws which 
produce changes, if not in every year of age, at least at certain 
well-defined periods. It is apparent to ns all that it is most inse- 
cure in infancy and old age. At the age of puberty — before the 
period when the growth of the body is most rapid — before the 
age of its greatest strength — before the age of greatest intellec- 
tual power — it is least assailable by death. The chance of living 
through a given year increases from birth to the age of 14 or 15. 
It decreases from that period to the age of 55 or 58, at a slightly- 
accelerating rate. Afterwards the vitality declines much more 
rapidly. A careful perusal of the following Table will most fully 
confirm this fact : — 

Out of one million male births there will die in the first year of life 180,492 

At the age ol 13 there will die of the same number 5,742 

23 " " 15,074 

34 " " 11,707 

48 " " 14,870 

58 " " 29,185 

68 " * 61,741 

78 " " 114,255 

84 " " 178,130 

For the statistics which precede, we are indebted to Dr. South- 
wood Smith, who derived them from Mr. Finlaison's Report. It 
will be observed that they apply to the male sex only, "in which 
the development is more emphatically marked." The same divi- 
sions and comparisons do not, in all cases, apply to females, as 
will be hereafter explained. Mr. Edmonds, speaking of both sexes, 
has advanced a theory that there are three distinctly marked pe- 
riods of human life: one from birth to about 8 years, when the 
mortality decreases 32| per cent, annually; a second from the age 
of about 12 to 55, when the rate of mortality increases 3 per cent, 
per annum; and lastly, from 55 and upwards, when it increases 8 
per cent. Physiologists, however, assign/'owr periods or divisions : 
the embryonic, immature, reproductive, and sterile ages ; — the first 
terminating at birth ; the second at puberty, which is achieved at 
15 ; the third at 45, after which few mothers have children; and 
the last at 100 and upwards. The numbers in Great Britain, at the 
three latter periods, in 1851, were — males under 15, 3,754,936; 
of 15 and under 45, 4,811,172; of 45 and upwards, 1,851,235. Of 
females, the number under 15 was 3,703,144; of 15 and under 45, 
4,984,299; of 45 and upwards, 2,080,224. 

The popular English divisions of life are expressed in the Ian- 



80 



CHINESE DIVISIONS OF LIFE. 



gnage by several characteristic words, such as babe, suckling, 
infant, child, boy, girl, lad, lass, youth, maiden, and young, middle- 
aged, old, man, woman. These words are not used with so much 
precision as they might easily acquire; and some of them, derived 
from different sources, are used synonymously, while the latter 
terms often include the period which the earlier words especially 
designate. But (using a little force to make them express con- 
secutive ages) it may be said that Great Britain, in 1851, con- 
tained 

Babes and Sucklings under one year 
Infants from one to five years 
Children from five to ten 
Boys from ten to fifteen 
Girls from ten to fifteen 
Youths from fifteen to twenty 
Maidens from fifteen to twenty 
Young men from twenty to thirty . . 
Young women from twenty to thirty 
Middle aged men from thirty to fifty 
Middle aged women from thirty to fifty 
Elderly men and women from fifty to sixty 
Old, from sixty to seventy 
Very old, being above seventy 

The Chinese divisions or epochs of life ar 
periods, or progress decimally. The age of 10 is called the " open- 
ing degree;" 20, "youth expired;" 30, " strength and marriage;" 
40, "officially apt;" 50, "error knowing;" 60, "cycle closing;" 
70, " rare bird of age ;" 80, " rusty visaged ;" 90, " delayed ;" 
100, "age's extremity."* Some of these designations are expres- 
sive enough ; and in point of time correspond very nearly with 
our own. We may add, that the density of the population of 
China, in eighteen of the provinces enumerated in 1812, was 268 
to each square mile; "which," says Sir John Bowring, "is con- 
siderably less than the population of the densely peopled countries 
of Europe." It is certainly less than we might infer from various 
published accounts of the "Empire of the Sun." 

We now come to speak of the influence of Locality upon the 
duration of life, and shall first begin with some of the European 
Countries. Out of 1,000 children born at the same time there will 
be living at the ages named in the first column, the numbers stated 
in the succeeding columns: — 



578,743 
2,166,456 
2,456,066 
1,141,933 
1,114,882 
1,051,630 
1.048,404 
1,830,588 
1,939,906 
2,376,904 
2,482,382 
1,452,516 
948,570 
596,030 



e marked by decennial 



Age. 


Carlisle. 


France. 


Sweden. 


Vienna. 


Holland. 


1 


846 


768 


780 


542 


804 


10 


646 


551 


611 


327 


639 


20 


609 


502 


570 


288 


584 


30 


564 


438 


519 


247 


508 


40 


508 


369 


459 


199 


432 


50 


440 


297 


385 


147 


362 


60 


364 


214 


293 


96 


273 


70 


240 


118 


175 


48 


175 


80 


17 


35 


56 


16 


72 


90 


4 


4 


5 


2 


7 



* Sir John Bowring's letter to the Registrar-General, vide " Statistical Journal," vol. xx., 
p r 42. 



RELATIVE MORTALITY OF NATIONS. 81 

Holland, of the several places named, is seen to approach most 
nearly to England in point of salubrity ; and at the two last ages 
it appears even more favorable. Vienna is seen to be by far the 
most unhealthy. 

From these elementary observations other results are deduced, 
as, for instance, the following; some other countries being intro- 
duced : — 

In England the annual rate of mortality is 23 per 1000. 



n Denmark 


«( 


tl 


23 per 1000 


In Prussia 


" 


<< 


28 per 1000 


" Holland 


(t 


(t 


24 " 


" Sardinia 


« 


it 


30 " 


" France 


C( 


(( 


23i " 


" Austria 


" 


(i 


31 " 


" Sweden 


it 


(t 


24 " 


" Russia 


« 


(t 


36 " 



They may be read thus : out of every 1,000 persons living at 
the commencement of any one year, the number stated die during 
that year ; or they may be read thus : — 

In England the annual mortality is one in 45. 

In France " " 1 in 42 I In Austria " " 1 in 33 

" Prussia " " 1 in 38 | " Russia " " 1 in 28 

The latter figures are on the authority of Dr. Farr, than whom 
we have no greater ; the former are taken from Hygiene ; or the 
Hand-Book of Health ; a recent publication of merit. A very 
slight difference in results is perceptible. 

In 1841 the " measures of salubrity " were applied in the follow- 
ing instances, with the following results :* — 

Mean lifetime, or the ex- 
England, one death in 46 Mean age at death 29 yrs. pectation of life 41 years. 
France " 42 " 34 " " 40 

Sweden " 41 " 31 " " 39 

Metropolis " 41 " 29 " * 37 

Liverpool " 30 " 21 " " 26 

Surrey (ex-metrop.) 52 " 34 " " 45 

These results apply to one year only, and that rather a favor- 
able one than otherwise; so that any variation presented between 
them and those just given will be understood. It is satisfactory 
to see the results, where they apply, so closely approximate. 

The importance of periodic tests of this kind is apparent if only 
for the purpose of checking the erroneous impressions which are 
formed in the absence of correct data. It is not very many years 
since Sir Francis D'lvernois, "a gentleman who devoted many 
years to the elucidation of various phenomena relating to the law 
of mortality,"! presented to Mr. Rickman, under whose direction 
the population returns of this kingdom were entrusted, the follow- 
ing statement of the relative mortality of several countries with 
which he was familiar : 

England and "Wales one death to 59 living. 



Sweden and Denmark one to 48 living, 
Holland and Belgium " 43 
France " 40 



United States of America, 

one to 37 living, 
Prussia " 36 " 

Wirtemburg " 33 " 



* Vide 6th Annual Report of Registrar-General. 

t Vide Porter's Progress of the Nation, 2nd edition. 



82 RELATIVE MORTALITY OP CITIES. 

And this has been reproduced in books of reference down to the 
present time. It appears to have been framed for the purpose of 
nattering English vanity; for, notwithstanding the improvements 
which have since taken place in the mortality of the kingdom, it 
gives the rate of decrement nearly twenty-five per cent, too favor- 
able even for the present time, while, perhaps, with the exception 
of France, the decrements of the other places named are rather 
over than understated. Such exaggerated estimates tend to re- 
tard improvement by creating a feeling of contentment rather than 
encouraging a spirit of improvement. In another place we shall 
note how Mr. Rickman fell, or was led, into the erroneous belief 
that Liverpool was one of the most healthy towns in England, 
when the short space of a few minutes will show us that it is very 
nearly, if not Avholly, the most unhealthy. 

The Registrar-General, in one of the earliest of his valuable 
series of reports, remarked that — 

" A comparison of the duration of successive generations in England, France, 
Prussia, Austria, Russia, America, and other States, would throw much light 
on the physical condition of the respective populations, and suggest to scien- 
tific and benevolent individuals in every country, and to the Governments, 
many ways of diminishing the sufferings, and ameliorating the health and 
condition of the people ; for the longer life of a nation denotes more than it 
does in an individual, a happier life ; a life more exempt from sickness and 
infirmity, a life of greater energy and industry, of greater experience and wis- 
dom. By these comparisons a noble national emulation might be excited, and 
rival nations would read of sickness diminished, deformity banished, life saved, 
of victories over death and the grave, loith as much enthusiasm as of victories 
over each other's armies in the field, and the triumph of one would not be the 
humiliation of the other; for in their contention none could lose territory, or 
honor, or blood, but all would gam strength"* 

The following figures speak to these points. England, in each 
case, maintains a noble ascendency. The mortality of Russia is 
indeed nearly double that of England. With respect to the gen- 
eral mortality of Europe, Dr. South wood Smith says, " There is 
reason to believe that the mortality at present (1847) throughout 
Europe, taking all countries together, including towns and villages, 
and combining all classes into one aggregate, is one in thirty-six." 
In England, we have seen, it is only one in forty-five! 

Next, we may look to the mortality of Cities. 

In London the annual mortality is 25 per 1,000. 



In Berlin 25 per 1000 

"Turin 26 

"Paris 28 

" Genoa 31 

"Lyons 33 



In Hamburg 36 per 1 000 

Moscow 38 " 

Stockholm ... 39 " 

St. Petersburg .... 41 

Vienna 49 " 



The reading of the Table is the same as that relating to coun- 
tries. 

London has been found to stand in the scale of health in tbe 
following proportions with the following places : — 

* Fifth Annual Report, p. 19. 



HEALTH OF LONDON. 83 

With respect to Paris, as 40 to 32. 
With respect to Leghorn as 40 to 35 I With respect to Rome as 40 to 24 
Naples as 40 to 28J | " Vienna as 40 to 22£ 

The yearly mortality in the latter city is nearly 5 per cent, of 
the whole population annually. The compiler of these last figures 
remarked that " the average duration of life is greater, and the in- 
crease more rapid, in England than in almost any foreign city or 
state in Europe."* In 1841 the " mean age "of 45,507 persons 
who died in London was 29 years, and the mortality one in forty. 

Mr. Henry Mayhew, in his famous work, the Great World of 
London, remarks of that city, that it may be safely asserted to be 
the most densely-populated city in all the world, containing one- 
fourth more people than there are in Pekin, and two-thirds more 
than Paris; more than twice as many as Constantinople ; four times 
as many as St. Petersburg!] ; five times as many as Vienna, or New 
York, or Madrid; nearly seven times as many as Berlin; eight 
times as many as Amsterdam ; nine times as many as Rome ; fifteen 
times as many as Copenhagen ; and seventeen times as many as 
Stockholm. 

Here is a more miscellaneous Table, which does not speak so 
well for London as for some other cities ; but it will be noticed 
that the observations on which it is based extended over a very 
short period. 



In Stockholm, 
of 6 years 
" Vienna 


Population died 
Annually, 
on an average 

Iinl9 

Iin20 


Population died 
Annually. 
In Northampton, on an aver- 
age of 6 years 1 in 26£ 

" Berlin 1 in 26* 


" Edinburgh 




... Iin20 


" Sweden 1 in 35 


" London . . 


. ... 


... 1 in 20f 


" Vaud, Switzerland ... 1 in 45 


" Rome 




... Iin21£ 


" Ack worth, Yorkshire ... 1 in 47 


" Amsterdam 




... Iin22 


" Madeira 1 in 50 



Between London and Ackworth in Yorkshire a difference of 
more than 100 per cent, in the average of mortality is observable. 
But to meet such facts as these, Mr. Milne, in his excellent work 
on annuities, has given us the following solution : — " It is well 
known that the inhabitants of large towns, from their sedentary 
habits, their pernicious occupations, their vices, and the want of 
cleanliness amongst those of the lowest class, are subject to 
greater mortality than those who reside in small towns and vil- 
lages, or in the open country ; and this is one of the causes of 
the difference that is observable between the rates of mortality 
in the different counties ;" and, he might have added, in different 
parts of the same county. 

But if we are satisfied with Mr. Milne's solution of the causes 
of different rates of mortality in different counties, or extend it, 
as we have done, to different parts of the same county, what 
shall be said to the following figures giving the variations to 
which the different classes of inhabitants are subjected in the 
same town f They deserve most serious consideration : — 
* " Health and Habits of the People." By John Hogg, M. D. 



84 MORTALITY IN TOWN AND COUNTRY. 



The Gentry live. 


Tradesmen. 


Laborers. 


General Average. 


In Rutlandshire ... 52 years. 


41 


years. 


38 years. 


43 years 8 months. 


In the town of Truro 40 " 


33 


" 


28 " 


33 


" 8 " 


" Derby 49 " 


38 


tt 


21 " 


36 


« « 


" Manchester ... 38 " 


20 


a 


17 " 


25 


« „ 


"Bolton 34 " 


23 


« 


18 " 


25 


" " 


" Bethnal Green ... 45 " 


26 


" 


16 " 


29 


" " 


" Leeds 44 " 


27 


a 


19 " 


30 


« u 


" Liverpool 35 " 


22 


" 


15 " 


24 


' " 


Here is food for reflection ! 


Manchester and Bolton show a 



general average duration of life amongst all classes of only a lit- 
tle better than half that of Rutlandshire. Liverpool is still worse ! 
Surrey, which is not included in the Table, gives the general 
average duration of life for all classes at 45, which is higher than 
any of those shown. It is an ascertained fact, that of 100,000 
infants born alive, in Surrey, more than half (50,000) are alive at 
the age of 50 ; while out of the same number born alive only 
41,000 live to the age of 50 in the metropolis; and but 26,000 
(little more than half the number of Surrey) in Liverpool !* 

But as a more extended, and decisive, example of the relative 
effects of town and country life upon the mortality returns, the 
Registrar-General, a few years since, took two districts — one 
country and the other town — sufficiently extensive in area and 
population to secure the proper operation of the law of mortality, 
and recorded his observations upon them. The country district 
comprised the counties of Essex, Norfolk (except Norwich), 
Suffolk, Sussex, Gloucestershire (except Bristol and Clifton), 
Herefordshire, and Westmoreland, comprising an area of about 
9,352 square miles ; the population being in 1841, 1,700,484. 
The town district comprised Birmingham, Aston, Bristol, Clifton, 
Bath, Manchester, Salford, Liverpool, West Derby (adjoining 
Liverpool), Cambridge, Carlisle, Derby, Dudley, Exeter, Leeds, 
Leicester, Maidstone, Newcastle-on-Tyne, Sunderland, North- 
ampton, Nottingham, Sheffield, Stoke-on-Trent, Wolstanton, and 
Wolverhampton, standing upon 666 square miles, and having a 
population of 1,883,693. The deaths in the first district were 
132,116; and in the latter 205,966. Striking off 20,000 for the 
excess of the population in the second over the first district, the 
result shows the difference in deaths at the same time, and out 
of the same population, varying only in their location, viz. : — 

Deaths in town districts .. . ., 185,966 

" Country districts ... 132,116 

Difference against town districts 53,850 or 40*7 

The deaths in 1840 showed the annual mortality to be — 

In town districts out of every 1,000,000 living . . . 27,073 
Country districts " " " ... 19,300 

Difference against town districts 7,773 or 40 - 2 

* Fifth Report of Registrar-General. 



WHEN THE MAJORITY OF DEATHS TAKE PLACE. 85 

The population in the country districts being 199, and in the 
town districts 5,108 to the square mile.* 

The annual mortality in London, except in periods of great 
epidemics, is at the rates following : — 

Children and young persons under 20 years of age ... 31 in 1000 

Men and women, from 20 to 40 " ... 10 in 1000 

" 40 to 60 " ... 23 in 1000 

« " 60 to 80 " ... 72 in 1000 

" 80 and upwards " ... 224 in 1000 

Average at all ages 25 in 1000 

But the various districts of London vary almost as much between 
themselves as London varies from the kingdom generally. In 
the fifth annual report of the Registrar-General some compari- 
sons are drawn between the expectation of life in the opposite 
districts of St. George's, Hanover Square, and Whitechapel. The 
expectation was computed on the population and deaths of 1841, 
when the mortality was low in both districts. At the age of 20 
the male expectation of life in St. George's was found to be 39 
years and 6 months. In Whitechapel, at the same age, 33 years 
and 6 months, or just six years difference. The female expecta- 
tion, at the same age, in St. George's was about three years 
greater than the male expectation, and in Whitechapel about 
four years greater. At the age of 50 the male expectation in St. 
George's was 18 years and 8 months, and in Whitechapel 15 
years and 1 1 months — difference nearly 3 years. The female ex- 
pectation, at the advanced age, was only a few months greater 
than the male population. 

The Registrar-General has noted that the Eastern Division of 
London is subject to a rather higher mortality than the Southern 
(which lies south of the river), except in cholera years, when the 
epidemic, taking advantage of a lower level, causes the mortality 
to rise higher on the south side. The years 1850 and 1851, in 
which the mortality was nearly the same in the two divisions, 
furnish the only instances within nine years which can be ad- 
duced against the operation of this rule. 

In a work published a few years since by Mr. Cyrus Redding, — 
if we remember rightly, a History of Cornwall, — we saw it re- 
marked, that in the southern counties of England the majority of 
deaths take place in the March quarter — 'the minority in the Sep- 
tember quarter — and that the same rule held good with respect to 
births. That in the northern counties, as Cheshire, Lancashire, 
the Ridings of Yorkshire, Durham, Cumberland, Northumber- 
land, and Westmoreland, the births are uniformly most in the 
June quarter ; and that in the five north midland counties they 
are nearly equal in both these quarters. This observation has 
recurred to us at the last moment, and we have no opportunity 
now of testing its truth. 

* Fifth Report of Registrar-General. 



CHAPTER n. 

BIRTHS AND BIRTH-PLACES OF THE PEOPLE. 

The births in Great Britain are about 600,000 per annum, and 
exceed the deaths by nearly a quarter of a million annually. 
During the 13 years from 1839 to 1851, both inclusive, there were 
born in England and Wales, 3,634,235 males, and 3,465,629 fe- 
males ; consequently 104,865 boys were born to every 100,000 
girls ; or speaking in smaller numbers, 105 boys were born to 
every 100 girls. But to every 100,000 females living during 
those years there were only 96,741 males — being 105 females to 
every 100 males, or the exact reverse of the proportion of births. 
In France the proportion is 17 boys born to 16 girls ; and in 
Russia, 13 boys to 12 girls. The proportion of males to females 
born is smaller amongst illegitimate than amongst legitimate chil- 
dren.* 

The births registered in England, are, in proportion to the 
population, one-seventh part more numerous than in France ; and 
one-seventh part less than in Prussia. To every 3,525 inhabitants, 
100 births are annually registered in France; 113 in England ; 
133 in Prussia ; 136 in Austria; and 151 in Russia. f In England 
the proportion of twins to ordinary births is about 1 in 100 ; 
triplets about 1 in 6,000. One Mother dies in child-bed to every 
200 Children born. 

In the year 1851 the births registered in England and Wales 
were 615,865 ; of these 573,865 were the children of married, and 
42,000 of unmarried women. The number of married women of 
the child-bearing age, viz. — 15 to 55,J was returned at 2,553,894 
in that year ; and of unmarried women, including widows as well 
as spinsters, 2,449,669. So that the above figures give to each 
1,000 of married women 224 children born annually ; and to each 
1,000 unmarried women, 17 children bom annually! Upon 
which the Census Commissioners remark, that "186,920, or 1 in 
13 of the tmmarried women must be living so as to contribute as 
much to the births as an equal number of married women !" 
From these, or similar statistics, it has been calculated that one 
out of every fifteen Englishmen and Englishwomen now living 
was born illegitimate ! 

Again in 1853, the births were 612,391 ; of these 39,760, or six 
and a-halfper cent, of the whole number were bom out of wedlock. 

* Milne on Annuities, p. 493. 

+ 6th Annual Report of Registrar-General. 

X The Mothers of all the children that are born in the country are between the age of 15 
and 55, and the greater part of them are between the ages of 20 and 40. The English sche- 
dule is defective, as it does not show the age of the Father and Mother at the birth of the 
child ; but it may be inferred from the Swedish returns that not more than 1 in 8 women 
who bear children is under the age of 20 or above the age of 4Q.—Eegistrar- General. 



ILLEGITIMATE CHILDREN. 



87 



Some pains have been taken to ascertain the districts in which 
the greatest number of illegitimate births take place. The fol- 
lowing figures are curious. In London, so much abused on the 
score of immorality, the illegitimate births were only four per 
cent. ; while in Preston, in Lancashire, no less than ten per cent, 
were of this class. And even in the quiet little town of Stamford, 
in Lincolnshire, the proportion for the year named stood at 420 
legitimate to 40 illegitimate, being very nearly ten per cent. But 
the following passage from the 14th annual report of the Regis- 
trar-General takes a broader view of the subject : 



" Excluding- London from view, as the returns are probably imperfect, it 
may be inferred, that, generally, the unmarried women in the counties South 
of the Thames, comprising the descendants of the old Saxon population, have 
few illegitimate children : Wales stands next in the scale : the West Midland, 
the North Western, and the South Midland counties, covering the area of the 
ancient Mercia, present less favorable results ; while in Yorkshire, the North- 
ern counties, the North Midland counties, and particularly the Eastern coun- 
ties, covering the area of the ancient Danish population, the number of illegi- 
timate children is excessively greater." 

The seasons appear to have some influence on the births, as was 
remarked by Graunt two centuries ago.* The numbers registered 
in the first two quarters of 1851 were 157,286 and 159,073, whilst 
the births, in the last two quarters, were 150,594 and 148,912. 
The illegitimate births in that year were very equally distributed 
over the year, and amounted to 10,802, 10,526, 10,256, and 10,416 
in the four quarters. The deaths amongst illegitimate children 
at the younger ages, are very much more numerous than amongst 
legitimate children. 

It seems almost a universal law, that amongst illegitimate chil- 
dren the proportion of females is greater than amongst legitimate 
children. The following Table has been compiled in support of 
that view. The actual number of males born is greater than the 
females in every instance, as already explained ; but the propor- 
tion of males to females is less with illegitimate than legitimate 
births, thus : — 





Legitimate 


Illegitimate 


Legitimate 


Illegitimate 




Males to 


Males to 


Males to 


Males to 




1000 Females. 


1000 Females. 


1000 Females. 


1000 Females, 


Prussia (1820-34) 


. . . 1,060 


1,031 


East Prussia & Posen 1,058 


1,036 


France 


... 1.067 


1,048 . 


Paris 1,038 


1,034 


Naples (1819-24) 


... 1,045 


1,037 


Geneva (1814-33) . . . 1,090 


1,015 


Austria 


... 1,062 


1,042 


Amsterdam 1,050 


1,088 


Wirtemburg 


... 1,060 


1,035 


Leipzig 1,062 


1,059 


Sweden 


... 1,047 


1,031 


Montpellier (1772-92) 1,071 


1,008 


Bohemia 


... 1,057 


1,004 


Frankfort-on-Maine . . . 1,028 


1,078 



Westphalia (1809-11) 1,047 



1,004 



The only two exceptions in the above Table being Amsterdam 
and Frankfort. Various theories have been propounded to ac- 
count for this fact ; and in our opinion none of them are very 
satisfactory. 



* Vide, p. 19. 



88 CAUSES OF DEATH OF INFANTS. 

The difference between male and female mortality during in- 
fancy is very surprising, and not easily accounted for. Out 
of one million male births there will die during the first year 
180,492 (see a Table subsequently given), while out of the like 
number of female births there will be but 154,705, giving a diffe- 
rence of 25,787 in favor of the females ! Differences of this cha- 
racter exist through the whole period of male and female life, al- 
though not always on the same side. These were examined into 
by the Registrar-General in his sixteenth annual report. Out of 
1000 boys there die annually, during the first five years, 72*75 
(72f), while out of the same number of girls only 62*50 (62|) die. 
In the next stage of life, namely, between the ages of 5 and 10, 
out of the same numbers, 9*12 boys and 8*93 girls die. A change 
takes place between the ages of 10 and 15, for then 5*16 boys and 
5*40 girls die. The mortality of both sexes then increases, and 
the women, up to the age of 35, die in rather greater proportions 
than men. After the age of 45 the mortality of men is considera- 
bly higher than that of women. The mortality of 73 in 1000, as 
above, is nearly three times the average rate of the whole popu- 
lation, while the mortality of 5 in 1000, as between the ages of 
10 and 15, is only one-fourth or one-fifth of the general rate. 

There can be no doubt that a considerable per centage of the 
deaths amongst infants arise entirely through the ignorance and 
carelessness of their parents — more particularly of their mothers. 
Improved education will do much to remedy this ; and the sani- 
tary improvements now going on in all large towns and cities, 
have already had some influence in that direction. The follow- 
ing confirmatory remarks from so high an authority as the Regis- 
trar-General, should be carefully considered : — " During this 
period, when they are at home and under the care of the mother, 
and encounter the contagious diseases which beset the beginning 
of life, their safety depends very much upon the power of the 
parents to supply them with food and raiment — upon the mother's 
watchfulness and cleanliness — upon the air they are doomed to 
respire in imprisoned courts and alleys, or in the fresh open atmo- 
sphere of healthy country districts." 

There are also two other causes which have exercised, and are 
still exercising, considerable influence in increasing the mortality 
among infants — these are the adulterations of food, and the sys- 
tem of drugging them, which prevails so much in the manufac- 
turing districts — the latter more especially of the two. The 
authority from which we quote should carry both weight and 
conviction. Mr. Thomas Wakley, the Coroner for Middlesex, 
and proprietor of the Lancet (a medical publication), writes in 
the Times of 30th of July, 1856 :— 

" I continue to be more and more impressed with the conviction that the 
public, and especially the juvenile portion of it, suffer greatly from the prac- 
tice of adulteration which, so generally prevails." 



BIRTH-PLACES OF THE PEOPLE. 89 

We have also the additional testimony of Mr. Bianchi, that a 
great deal of the excessive mortality in London, amongst chil- 
dren, may be ascribed to impure milk, which is there retailed. 
On the second evil named, Mr. William Lee, one of the superin- 
tendent inspectors under the Board of Health (from whose able 
reports we shall hereafter frequently quote), says : — 

" The practice of giving opiates to infants is very prevalent in towns, espe- 
cially where females are employed in the staple manufactures of the place, as 
is the case in Loughborough. I fear the evil is rapidly increasing, and it 
should be generally known that the sleep produced by the various forms of 
anodyne, infants' mixture, Godfrey's cordial, &c, would be more properly de- 
signated stupefaction. Many affectionate mothers who would die to protect 
their offspring from external injury, destroy the lives of their helpless infants 
by the administration of these pernicious mixtures ; and even when the child 
survives the period of infancy, it grows up too often with a constitution enfee- 
bled, and consequently predisposed to disease. There is reason to fear that few, 
if any, who have been habitually drugged in infancy, live to enjoy the average 
degree of health during the ordinary period of existence."* 

The following calculation of the Census Commissioners of 1851, 
shows the influence of bachelorism and old-maidism in retarding 
the progress of the population, by keeping down the births : — 
" The British population contains a great reserve of more tha?i a 
million unmarried men, and more than a million unmarried 
women, in the prime of life, with as many more of younger ages ; 
and if the to hole of the population were married, the births in Great 
Britain would, instead of seven hundred thousand, be about sixteen 
hundred thousand annually, if they bore the same proportion to 
the wives at different ages as they do now !" 

An inquiry into the birth-places of the people furnishes some 
curious facts. Above 82 per cent, of the people of Great Britain 
were born in England and Wales; 13 per cent, in Scotland; 3|- 
per cent, in Ireland ; T % per cent, in the Islands of the British 
Seas; T 2 ¥ per cent, in the British Colonies; about T \ per cent, are 
subjects of Foreign States; of the 17,927,609 inhabitants of 
England and Wales 761,953 (=4|- per cent., or 1 in 24) were 
born beyond the limits; namely, 130,087 in Scotland; 13,753 in 
the Islands of the British Seas, and 519,959 in Ireland, and the 
rest elsewhere. About T 7 ¥ per cent, of the population of England 
and Wales were born in Scotland ; 3 per cent, in Ireland. Of 
the 2,888,742 inhabitants of Scotland, 266,022 (=9£ per cent., or 
1 in 11), were born beyond its borders ; 46,791, or If per cent., in 
England and Wales ; and 207,367, or 7 per cent, in Ireland. 

Speaking of London only, 30,401 of its inhabitants in 1851 
(taking all ages) were born in Scotland', 2,211 in the Islands in 
the British Seas; 108,548 in Ireland ; 11,136 in the British Colo- 
nies. 29,352 of the then residents of London were born in For- 
eign States in the following proportions: 10,237 in Germany / 

* The five years ending in 1860 show a total of 1,130 inquisitions on the bodies of children 
under two years of age, all of whom had been murdered. The average is 226 yearly. Note, 



90 MORTALITY IN LYING-IN HOSPITALS. 

7,217 in France; Belgium had sent 703 of her people; Holland 
1,930; Denmark 292 ; Norway 322; Sweden 335 ; Russia 1,169; 
Persia 7; China 78; Arabia 10; Egypt 62. Switzerland had 
sent 835 of her natives; Spain 564; Portugal 376; Italy 1,604; 
Greece 177; Turkey 139. From America, the United States sent 
1,054 citizens; Mexico 30; Brazil 45. Nearly all the English 
counties have contributed largely to the London population ; in 
the aggregate, 588,000, or about one fourth ; while 1,457,000, or 
seven-twelfths of its population, were born within its limits. 

The births in London in 1855 only exceeded those of 1854 by 
260, being a remarkably small increase. " This," says the Reg- 
istrar-General, " is perhaps the effect of the high prices of food, 
and of war, which removes married men from their homes, to 
occupy garrisons and encampments, to man the fleets, or as work- 
men to furnish the mighty equipments of sea and land." 

We now come to a topic intimately connected with the births 
of the people. 

"The change," says Dr. Southwood Smith, "that has taken 
place in the condition of lying-in-women during the last century 
in all nations of Europe cannot be contemplated without astonish- 
ment. The mortality of lying-in-women in France, at the Hotel 
Dieu of Paris in 1780, is stated to have been one in fifteen. In 
1817 for the whole kingdom of Prussia, including all ranks, it was 
one in 112. In England in the year 1750, at the British Lying-in- 
Hospital of London, it was 1 in 42 ; in 1780 it diminished to 1 in 
60 ; in the years between 1789 and 1798 it further decreased to 1 
in 288 ; in 1822, at the Lying-in-Hospital in Dublin, it was no 
more than 1 in 223 ; while during the last 15 years (written pre- 
viously to 1847) at Lewes, a healthy provincial town, out of 2,410 
cases there have been only two deaths, that is, one in 1,205." He 
adds, "There is no reason to suppose that the mortality in the 
state of parturition is less at Lewes than in other equally healthy 
country towns in England." By the fifth annual report of the 
Registrar-General, we find 3,007 mothers died in childbed in the 
year 1841. On an average, eight died from childbed every day 
of the year. 11,722 English women died in childbed (including 
miscarriages and abortions) in four years, namely, 2,811 in 1838 ; 
2,915 in 1839; 2,989 in 1840 ; and 3,007 in 1847. The mortality 
teas one death to 171 births registered" The Registrar adds, 
" The returns under this head were less specific than could be de- 
sired." They seem sufficiently specific to show that while the 
mortality from this cause is greater than Dr. Smith seemed to an- 
ticipate, still that it is far more favorable than it was during the 
past century, and this may be attributed entirely to the improve- 
ments in medical science. 

Among the Hebrews and the Egyptians midwifery was prac- 
tised by women only. In France the same practice is very much 
followed out. There the " sages-femmes," as they are called, go 
through a regular course of instruction, theoretical and practical. 



MORTALITY IN LYING-IN HOSPITALS. 91 

Madame Boivin and others have greatly distinguished themselves 
there by their writings, and contributed not a little to the pro- 
gress of their art. Mr. Hoffman states that the Prussian Govern- 
ment supported in each of the eight provinces, schools of mid- 
wifery, which, in 1837, had furnished the county with 11,155 mid- 
wives, examined and passed by the medical boards; and Dr. 
Farr adds, " no one who has reflected upon the subject, and, cer- 
tainly, no one who has a practical acquaintance with it, will 
contend that the annual deaths [in England] of 3,000 women in 
childbirth, and of 13,350 boys, and 9,740 girls, in the first month 
after delivery, or the sufferings and deformity of many who es- 
cape with life, are natural and inevitable. Admit that the lives 
of a thousand, of five hundred, or of one hundred of these mothers 
might be saved, and that many more might be rescued from inju- 
ries and pains which disable, and never leave them ; and, assured- 
ly, no apathy, no false sentiments of delicacy, will prevent those 
who have the public health at heart, from giving the subject the 
most attentive consideration."* 

* Fifth Report of Registrar-GeneraL 



CHAPTER ni. 

MARRIAGE AND ITS INFLUENCES. 

About 150,000 marriages are solemnized in England and Wales 
every year — the number increasing with the increase of the popu- 
lation, and occasionally fluctuating from causes which will be noted 
as we proceed. In 1841 the marriages were 122,496, while in 
1851 they were 154,206, showing an increase of no less than 
31,710 in ten years, being at the rate of 3,171 per annum. Dur- 
ing the three years 1850-1-2, the marriages numbered 465,732, 
and their classification was as follows : — Between bachelors and 
spinsters, 380,721; between bachelors and widows, 19,896; and 
between widowers and widows, 22,200. In 1851, 58 out of every 
1,000 bachelors living at the commencement of the year, married 
during the year. The proportion varied in different districts from 
32 per 1,000 in Cumberland, and 36 in Herefordshire, up to 82 in 
the Surrey portion of London, which fact led a London wit to re- 
mark that mothers, with seven, or any greater number of daugh- 
ters, should take lodgings over the water ! 

The average age at which marriages take place in Great Bri- 
tain is 25 years. The average age of wives in Great Britain is 
40^ years; of husbands 43 years; — the husbands averaging 2^- 
years more than the wives. The conjoint lives of husband and 
wife continue about 27 years on the average. But if the hus- 
band be 40 at the time of marriage, and the wife only 30, the 
average is only 21 years. In the former case the widows survive 
their husbands 10 years, the widowers their wives 9 years ; in the 
latter, the widows survive 13 years, and the widowers live five 
years after the death of their wives. About 80 out of every 100 
married pairs have children living. The average of the last ten 
years is one marriage annually to every 119 persons living. 

Human life, says the Registrar-General, is naturally enough di- 
vided into two periods; the first terminates at the age of 25, which 
is now the average age of marriage in England ; the second period 
extends from that age to senility, or to the catastrophe of death. 
In the Roman law, 25 was the age of majority, as it is in the pre- 
sent French code for males. The number of persons at the last 
census in Great Britain under the age of 25 was 11,573,377 ; of 
the age of 25 and upwards, 9,611,633. 

By the common law of England, all persons under the age of 
21 are infants : 21 is the age of majority ; and in the five follow- 
ing years of age, half of the marriages in England are now con- 
tracted. The number of minors in Great Britain, at the census 
of 1851 was 9,985,133 ; the number of 21 years and upwards, was 
11,199,877. 



RELATIVE PROPORTIONS OF THE MARRIED AND UNMARRIED. 93 

Males at 14, and females at 12, may consent to marry, but can- 
not legally marry until the age of 21, without the consent of their 
guardians. And the English law regards 14 as the age at which 
a person is competent to distinguish right and wrong ; under 7, 
children are irresponsible ; between the ages of 7 and 14 they are 
in some cases responsible. The number of persons of the age of 
14 and upwards in 1851 was 14,167,871 ; of 14 and under 21, 
the number was 2,967,994 ; of 7 and under 14, the number was 
3,260,188. 

The number of husbands in England and Wales, at the time of 
taking the census, in 1851, was 2,958,564; of wives, 3,015,634. 
The number of husbands in Scotland was 410,349; of wives, 
422,296 : the difference in the numbers being occasioned by the 
absence of the husbands from England as sailors, soldiers, mer- 
chants, &g. Tliirty-four in one hundred men, and thirty-three in one 
hundred women of all ages in England and Wales, are married; 
while in Scotland thirty in one hundred men, and only twenty- 
eight in one hundred women are married. Taking Great Britain 
through, thirty-three in every one hundred males are married, 
and thirty-two in every one hundred females. Of one hundred 
young men of the ages from 20 to 25, both inclusive, twenty are 
married in England and Wales, sixteen in Scotland ; and the dis- 
parity diminishes, but the smaller proportion is on the side of 
Scotland until the age of 65, when the proportional numbers of 
men living in the married state exceed in Scotland the proportions 
in England. Of two hundred men of the age of 80 and upwards, 
thirty-six are husbands in England, and forty-two in Scotland. 

The number of widowers in Great Britain, in 1851, was 382,969, 
and of widows 795,590. In England and Wales seven, in Scot- 
land eight, in the islands of the British Seas nine, in one hundred 
of the female population are widows • and four in England and 
Wales, three in Scotland, and three in the Islands, out of one 
hundred males of all ages, are widoioers. There are proportion- 
ately more widows, and fewer widowers, in Scotland than in Eng- 
land, which may perhaps be accounted for by widowers marrying 
again more, and widows less, frequently in Scotland than in Eng- 
land. At the ages of 40 to 60 (meaning the ages ranging between 
these two extremes) sixteen in England, and nineteen in Scotland, 
out of one hundred women of that age, are widows. At 60 to 80, 
forty-Jive in England, and forty '-seven in Scotland are the propor- 
tions; which at 80 to 100 ascend to seventy-six in England, and 
to seventy in Scotland ; where old widows probably experience a 
high mortality, as until lately the provision for the sustenance of 
the aged poor was more imperfectly organized in Scotland than 
in England. 

Of women of the age of 20 and upwards, thirteen in one hun- 
dred are widows in England, fifteen in Scotland ; — while of one 
hundred men of that age, seven are widowers in England, seven 
in Scotland. The husbands are to the widowers nearly as nine to 



94 WIDOWS AND WIDOWERS. 

one in England ; the wives to the widows nearly four or five to 
one ; or more exactly, as one hundred, to eleven icidoioers, 
and twenty-one widows respectively. In Scotland the husbands 
are to the widowers as nine to one; wives to the widows, 
only as three or four to one. The proportion of widows, to 
single women of the age of 20 and upwards, ranges in the coun- 
ties of England from 11 to 14^ per cent. In the counties of Sus- 
sex, Bedford, Stafford, Nottingham, Derby, and the West Riding 
of Yorkshire, the proportional number of widows is less than 12 
per cent., and little exceeds one in eight women / in Cornwall, 
Hereford, Northumberland, Cumberland, and North Wales, it 
exceeds fourteen per cent., and one woman in seven is a widow. 
The other Counties occupy intermediate stations. 

In Lortdoii, the widows in one hundred women exceed fourteen ; 
and generally the healthiest districts contain the smallest proportion 
of widows. The healthier districts of Surrey are singularly 
distinguished ; for Reigate had less than ten widows in one 
hundred women. In these districts, the wives are to the widows, 
and perhaps the united life of marriage to the disjointed life of 
widowhood, as seven to one ; whereas in St. Olave's South wark, 
the wives are to the widows, only in the proportion of three to one. 

The widows exceed 15 per cent, in the following districts : Can- 
terbury, Bury St. Edmond's, Yarmouth, Salisbury, Plymouth, 
Stoke Damerel, Truro, Falmouth, Helston, Redruth, Scilly Islands, 
Bath, Bristol, Hull, Whitby, South Shields, Tynemouth, White- 
haven, and a few other districts. The great number of widows 
in the ports indicates the loss of great numbers of men at sea, of 
whom little other record is left than these relicts. 

In the Counties of Scotland, the proportion of widows to one 
hundred women of the age of 20 and upwards, ranged from eleven in 
Selkirk to 16 T 8 „ in Bute; in Renfrew it was 16; Lanark 15-J-; 
Edinburgh 16; Forfar 15; Aberdeen 15; Argyll 15 T V In no 
other county did the proportion exceed 15. If, however, we 
compare the widows with the wives, it is found that in Caithness, 
in the Orkneys, and Shetlands, and in several counties, the wives 
are to the widows as little more than three to one. In Edin- 
burghshire and Bute the widows are in a still higher proportion. 

The Census Commissioners remark, in connection with the fore- 
going facts, that the number of widows and widowers "stand 
like sad monuments of our mortality, of our ignorance, negligence, 
and disobedience of the laws of Nature, and as memorials, at the 
same time, we may hope, of the sufferings from which the people 
may be delivered by sanitary discoveries and observances." * 

Dr. Milne, the learned compiler of the Carlisle Table of Mor- 
tality, had noted, many years previously, the great proportion of 
widows to widowers, and entered into the following speculation 
as to the probable cause or causes. He says, — 

* Census Report. 



FLUCTUATION IN NUMBER OF MARRIAGES. 95 

" 1st. Men are in general more intemperate than women. 2nd. They are 
exposed to greater hardships and dangers. 3rd. Widowers, perhaps, in 
general have greater opportunities of getting wives, than widows have of 
getting husbands. 4th . . 5th and lastly, The constitutions of males, as 
fitted for more violent and laborious exertions, are firmer and more robust 
than those of females ; their muscular and nervous fibres may therefore be 
supposed to become stiff, rigid, and incapable of performing the functions 
necessary to health and life sooner than those of females, both on account 
of their original texture, and the friction which must necessarily occur from 
laborious exercise." 

The consideration of the foregoing, and similar facts, led to 
other and more philosophic, if not more serious reflections, on the 
part of the Census Commissioners : — 

" The passions and affections of men," they say, " are governed by laws as 
certain as those of the heavenly bodies ; but it is not true — as the phenomena 
are complicated — that the acts of particular individuals can always be pre- 
dicted ; and in discarding this notion we get rid of the vulgar error ; but it 
is true that the acts of numbers of individuals can be predicted with sufficient 
certainty for practical purposes ; for the marriage returns, and those enumer- 
ations in conjunction with the Life Tables, furnish the means of calculating 
the chances that a man or woman, young or old, and unmarried, will marry 
before, in, or after a given year of age, of calculating the probability of remain- 
ing a spinster or a bachelor, or of being a widower, or a widow ; and these 
calculations will serve, not merely to gratify idle curiosity, but to guide the 
course of men's lives, to make provisions for children who marry, as well as 
for those who do not marry, and to direct the establishment and conduct of 
social institutions which may mitigate the calamities of premature death."* 

Professor de Morgan has offered the following remarks upon 
the causes of fluctuation in the number of marriages, which is 
observable on looking over the returns for a series of years, and. 
has also offered a solution of a circumstance also noticeable, that 
in years which show the greatest number of births, the Mortality 
Tables also show a diminution in the deaths. This will be ren- 
dered more apparent by a Table presently to be given ; but here 
is the Professor's dictum, delivered with his usual clearness : — 

" When provisions are cheap, or wages high, when, in fact, it is easy to 
maintain a family, marriages are more frequent, and are contracted at earlier 
acres. The same abundance of nourishment which tends to production, also 
tends to preservation, both of parents and children ; the consequence of which 
is, that a rapid increase of population is often accompanied by a diminution of 
the proportionate mortality. On the other hand, from contrary causes, a di- 
minution of the rate of population may be attended by an increase of the 
mortality." 

The influence of marriage on the probable duration of life opens 
a curious field for speculation. That it has an influence, more 
than one writer bears testimony ; and statistics have been adduced 
in support of the theory. Voltaire has asserted, that the majority 
of persons who commit suicide are unmarried, adducing this 
circumstance as an evidence that the wedded state is favorable to 
the prolongation of life. Hufeland also entertains the existence 

* On this passage was founded the Female Provident Office, for securing annuities to 
unmarried females, &c, &c. 



96 MARRIAGE CONDUCIVE TO LONG LIFE. 

of such a theory; and Deparcieux reports, "that people live 
longer in a state of matrimony than celibacy — the number of 
married men who die after the age of 20 being nearly one-half 
less than the number of bachelors dying at the same period; 
and for 43 benedicts or widows who reach the age of 90, there is 
only one-seventh part thereof of single men found to attain the 
same age ;." and this effect upon the disposition in life, is even 
more important as it applies to females than males. It will be 
seen that the number of unmarried females who die after the 
age of 20 bears a quadruple proportion of excess to married 
women who die at the same period. 

Dr. Casper, of Berlin, who has paid considerable attention to 
this point, bears out the above views. M. Odier also has made 
observations, and produced the following Table : — 





A married female has to live 


An unmarried do. 


Difference. 




years, months. 


years. 


months. 


years, months. 


the age of 20 


40 4 


30 


8 


9 8 


25 


36 


30 


6 


5 6 


30 


32' 5 


28 


11 


3 6 


35 


28 11 


26 


4 


2 7 


40 


25 7 


23 


5 


2 2 



Or to illustrate the subject in a more comprehensive and strik- 
ing form, a female now aged 25, by marrying extends her pro- 
bability of life by h\ years !* 

By way of qualifying the above Table, we quote the following 
remarks from Dr. Milne's work on Annuities, which appear very 
reasonable : — 

" It is obvious that the best organized, and most vigorous individuals of 
both sexes, but especially females, are the most likely to marry ; and that but 
a small proportion will be married of those (particularly of females) who labor 
under any infirmity that tends materially to shorten life. The married, 
therefore, will, upon an average, be a selection of such lives from the general 
mass of the population as would have been the lest, whether they had married 
or not ; and it is very difficult to determine what effect marriage may have 
had in improving them." 

Iceland appears to be especially remarkable for the productive- 
ness of its marriages. Dr. Schleisner, in the Statistical Journal 
of March, 1851, says, "Almost all the foreigners who have tra- 
velled in Iceland have mentioned the extraordinary fecundity of 
the nation as something remarkable. It is noticed that marriages 
with 20 children and upwards occur frequently. But from such 
single facts, a general rule for the fertility of the nation cannot be 
deduced. I have tried to find it out. The fertility of a nation is 
generally indicated by the proportion of the children born to the 
whole population. Dr. Kayser, professor of statistics at the 
University of Copenhagen, has made a correction in that test. 
Instead of fixing the births in proportion to the whole population, 
lie fixes them in proportion to the whole number of women at 

* See Transactions of Association for Promotion of Social Science, 1859: Dr. Farr on the 
Influence of Marriage in France, p. 504. Note, 1866. 



MARRIAGES IN TOWN AND COUNTRY. 97 

the fertile age, which, for the northern countries, is between 20 
and 50 years." He then enters upon a comparison of the results 
obtained by Dr. Kayser for Denmark, and those by himself for 
Iceland : the former being founded on a series of years, partly 
from 1830-44, and partly from 1827-44; the latter founded on 
the 10 years 1838-47. The following is an abstract only : — 

Proportion of births Proportion of legitimate Proportion of illegitimate 

to 100 women between births to 100 married births to 100 unmarried 

20 and 50. women between 20 and 50. women between 20 and 50. 

Denmark. 15*2 per cent. 23 6 per cent. 377 per cent. 

Iceland . . 169 "■ 282 " 4"8 

The proportion of boys born to girls, is 105*7 per cent, in Den- 
mark, and 106*0 in Iceland; and out of the whole number of 
births, 1*23 (l£) per cent, are tvrins, and '015 per cent. (1 in about 
600) are triplets in Denmark, while 1*43 (1^ per cent.) are twins, 
and -095 percent, (nearly 1 in 100) are triplets in Iceland. 

It will hence be seen, he continues, that the fertility of Icelandic, 
both married, and especially unmarried, is a great deal greater 
than that of the Danish, but that the population, in point of fer- 
tility, is not so well composed as the Danish. In Denmark, the 
number of married women out of the whole number of fertile wo- 
men is 57*4 per cent., while in Iceland it is only 51*9 per cent. It 
will be seen from the above figures that the number of male 
births exceeds that of female births in a higher degree in Iceland 
than in Denmark. He has already shown that the probable life- 
time of the Icelandic, in relation to the males, is still better than 
in Denmark: hence it will not excite wonder to find that in the 
Icelandic population, the proportion of males to the females is as 
1,000 to 1,120; while the proportion in Denmark is as 1,000 to 
1,023. The proportion of still-born children is more favorable in 
Iceland than in Denmark ; the proportion of still-born children to 
the whole number of births in the former being 3*3 per cent., and 
in the latter 4'4 per cent. The proportion of still-born males to 
the whole number of male births was, in Iceland, 3*6 per cent. ; in 
Denmark, 4'9 per cent. ; and of still-born females to the whole 
number of female births in Iceland 2.9, and in Denmark 3*8 per 
cent. It is also the case in Iceland as elsewhere, that this propor- 
tion is less favorable in the illegitimate births than in the legiti- 
mate. 

In a publication, entitled Natural and Political Observations 
and Conclusions upon the State and Condition of England, pub- 
lished in 1696, Gregory King, after giving the estimated num- 
bers of the population, and the annual marriages and births in 
England in his time, offers the following observations on the pro- 
ductiveness of marriages : We may observe that in 1,000 co-ex- 
isting persons 

There are 71 or 72 marriages in the Country producing 343 children. 
78 marriages in Town, producing 352 children. 

94 marriages in London, producing 37*6 children. 

Whereby it follows, — 1. That though each marriage in London 



98 MARRIAGES IN TOWN AND COUNTRY. 

produces fewer people than in the country, yet London in general, 
having a greater proportion of breeders, is move prolific than the 
other great towns, and the great towns are more prolific than the 
country. 2. That if the people of London, of all ages, were as 
long-lived as those in the country, London would increase in 
people much faster, pro rata, than in the country. 3. That the 
reason why each marriage in London produces fewer children 
than the country marriages seems to be (1). From the excess of 
vice and immorality. (2). From the greater luxury and intem- 
perance. (3). From the greater intenseness to business. (4). From 
the unhealthiness of the coal smoke! (5). From the greater 
inequality in age between the husbands and wives. 



CHAPTER IV. 

DEATHS— THEIR NUMBER AND CAUSES. 

The deaths in England and Wales are about 400,000 annually, 
increasing with the population, and fluctuating very slightly. 
During the three years, 1850-1-2, the total deaths were 1,171,526, 
being at the rate of 1,066 daily, or 44f hourly ; and this is 
about the ordinary rate. The annual per centage of deaths is 
about 2^ over the whole population, varying from If (l'765) in 
Rutlandshire, to 2| (2-818) in Lancashire. The mortality is 
highest in winter, and lowest in summer, varying, however, 
slightly in the different districts. When this order is reversed, 
the cause is some epidemic, such as cholera, which is most fatal 
in the summer season of the year. The rate of mortality 
amongst children under five years of age is observed to be 
steadily increasing. It was 6f in 1850, 7£ in 1851, and 7-J in 
1852 for every 100 males living. 

With a view to place mortality observations on a more scienti- 
fic basis, the Registrar-General has arranged the " causes of 
death " under seventeen general heads or classes. These again 
are divided mto five sections; — and they are arranged as follows. 
The figures apply to all England and Wales, and the sexes are 
distinguished. We will take the result of two years — 1851 and 
1852 — as bearing more particularly on some of the examples pre- 
viously given. 

Year 1851. Tear 1852. 

CAUSES OP DEATH. Males. Females. Males. Females. 

1 Zymotic Diseases (fevers, &o.) . . 42,770 43,830 46,103 46,309 

Specific Diseases. 

2 Diseases of uncertain or variable seat ) n ono ..., Kno APRr - ,- nA 

(ulcers, gout, &c.) f 7 ' 822 U ' 598 8 > 065 n ' 590 

3 Tubercular Diseases (consumption, &c.) 31,573 32,502 32,518 33,615 

Organic Diseases. 

4 Diseases of the Nervous System . . 26,823 23,031 27,331 23,402 

5 Diseases of the Organs of Circulation 5,746 6,071 6,148 6,369 

6 Diseases of the Respiratory Organs) 9*970. 99100 9*717 91 coo 

(Pneumonia, Bronchitis, &c.) . . \ xJ0 ' 370 22 ' 489 25 ' 717 21 ' 683 

7 Diseases of the Digestive Organs .. 11,694 11,525 11,907 11,834 

8 Diseases of the Urinary Organs . . 2,611 805 2,827 862 

9 Child-birth, and Diseases of the Organs ) Q o o on* -in onoA 

of Generation \ S2 d ' 295 lb 3 ' 2d4 

10 Diseases of the Organs of Locomotion 1,318 1,094 1,402 1,213 

11 Diseases of the Integumentary System ) Ki/i QOfl AaCi QACi 

(the Skin, &c.) j" 5M d2b 49U 6W 

Diseases of Growth, Nutrition & Decay. 

12 Malformations 445 341 454 407 

13 Premature Birth and Debility . . 10,558 8,385 10,451 8,624 

14 Atrophy (Indigestion) 5,912 6,283 6,526 6,530 

15 Age 11,243 14,753 11,105 15,271 

16 Sudden (disease unascertained) . . 1,986 1,472 2,105 1,486 

17 External, Causes (injuries, accidents, 

&c.) 9,723 3,836 10,458 4,017 



100 PROPHECY MADE EASY. 



Who, after perusing the foregoing figures, can have any doubt 
about the uniformity in operation of the laws of mortality ? But 
if two years be too brief a period from which to draw a conclu- 
sion, let us cast our eye over the results of five years, combining 
the sexes : — here are the figures : — 

CAUSES OP DEATH. Years 1848. 

Total Deaths from all causes. . 398,385 

1 Zymotic Diseases 97,983 

2 Diseases of uncertain or va- 

riable seat 19,699 

3 Tubercular Diseases 66,025 

4 Diseases of the Nervous 

System 46,090 

5 Diseases of the Organs of 

Circulation 9,654 

6 Diseases of the Respiratory 

Organs 44,801 

7 Diseases of the Digestive 

Organs 23,367 

8 Diseases of the Urinary Or- 

gans 3,041 

9 Child-birth and Diseases of 

the Organs of Generation 3,121 

10 Diseases of the Organs of 

Locomotion 1,947 

11 Diseases of the Integumen- 

tary System 670 

12 Malformations 797 

13 Premature Birth & Debility 16,345 

14 Atrophy . . 9,614 

15 Age 27,520 

16 Sudden 3,197 

17 External Causes 13,551 

By way of furnishing a practical application of the information 
which we have just brought together, we may venture to predict 
that the deaths in London during the present year, 1857, will be 
from 60,000 to 61,000, assuming that no extraordinary epidemic 
should break out to alter the average. f And, keeping this pro- 
viso in view, we will go further, and state that one out of every 
five of such deaths will arise from fevers, diarrhcea, or some 
other of the diseases classed as zymotic. That one out of every 
six will arise from consumption (tubercular diseases), and another 
out of every six from bronchitis, pneumonia, or the diseases of 
the respiratory organs, other than consumption. That one out of 
every 10 will die from disease and derangement of the nervous 
system ; and one out of every 20 from disease and derangement 
of the digestive orgctns / while only one out of 30 will die of 

* 1849 was the cholera year. 

t They were 59,103. The year was a very healthy one. Vide Twentieth Annual Eeport 
of Registrar-General. Note, 1866. 



1849. 


1850. 


1851. 


1852. 


440,833 


368,602 


395,396 


407,135 


137,770* 


74,833 


86,600 


92,412 


19,480 
65,206 


19,341 
60,385 


19,420 
64,075 


19,655 
66,133 


47,911 


47,450 


49,854 


50,733 


10,850 


11,357 


11,817 


12,517 


44,542 


43,827 


48,759 


47,400 


23,503 


22,314 


23,219 


23,741 


3,129 


3,332 


3 416 


3,689 


3,243 


3,187 


3,327 


3,250 


2,377 


2,367 


2,412 


2,615 


917 
713 
17,528 
10,317 
28,335 
3,555 
13,334 


725 

781 

18,045 

9,950 

26,102 

3,559 

13,987 


840 
786 
18,943 
12,195 
25,996 
3,458 
13,559 


830 
861 
19,075 
13,056 
26,376 
3,591 
14,475 



STATISTICS OF SUDDEN DEATHS. 101 

old age ! Tetanus, or lockjaw will claim one out of every 4,000 
for its victim ; and altogether no less than 106 diseases will each 
carry off some portion of the predicted number. The very 
thought of such an army of destroyers makes one's blood run cold ; 
but it is so. Well, we will add another item to our prediction ; 
and let those who are curious apply the test; the Registrar's re- 
ports will furnish them with the materials for so doing. More 
than one-fifth of the entire deaths will be under one year of age. 
More than one-third under five years ; and not more than one in 
300 will reach the age of 90 ! 

The ordinary annual mortality in London, as we have seen, 
is 25 per 1,000. In 1856 the deaths were only 22 per 1,000, 
— a result, as the Times ably pointed out, more favorable than 
any year except 1850, when "the field of destruction had been 
somewhat narrowed by the extraordinary ravages of the cholera 
in the previous autumn." 

The loeather in London, as through the country, has consider- 
able influence on the number of deaths ; and a mild winter is 
discoverable on the face of the bills of mortality. The Registrar- 
General, in his retrospect for 1856, gives a remarkable instance 
or two of this. The months of January, February, and March, 
were particularly mild, and the mortality was accordingly 
favorable. Passing over the summer months, we come to 
November, which " appeared to be closing mildly, when all of a 
sudden a severe frost set in, and continued for a few days, when it 
as rapidly vanished. The period of cold reached from the 26th of 
November to the 5th of December, both days inclusive ; and the 
Registrar-General has compared the mortality of the metropolis 
during these ten cold days with that prevailing during ten warm 
days — two of which preceded and eight followed the cold 
period. The very first approach of frost sent up the number of 
deaths, while its departure instantly sent them down again — the 
figures in the aggregate being 1,844 for the cold period, and 
1,505 for that of comparative warmth — giving an average in 
favor of mild weather of nearly 34 lives a dayP The warm 
months, notwithstanding our prejudices to the contrary, being 
almost invariably the healthiest of the year. 

The researches of Dr. Granville has enabled us to present 
some curious statistics on the subject of " sudden deaths." He 
found, out of 92,774 deaths of this class recorded in the registers, 
39,321 were from apoplexy, 35,975 from paralysis, and 17,478 
from other causes. Out of 27,848 deaths from these causes, the 
proportions in the various seasons were as follows : winter, 
8,164 ; autumn, 7,188 ; spring, 6,728 ; summer, 5,768. These 
figures overthrow the popular belief that heat promotes disease 
of the brain, for sudden deaths are much more numerous in 
winter than in summer ! He has also exposed the fallacy of 
another popular opinion, that sudden death is more frequent in 
advanced life than among the youthful. He shows that the period 



102 CONTRADICTORY THEORIES. 

of life between 30 and 65 is as liable to sudden death, if not more 
so, than between 65 and 100. But the proportion of liability of 
the sexes is very different. It is stated that women have less 
chance of dying suddenly than men in the proportion of 10 to 18. 
In paralysis, however, the proportion is reversed, and there the 
mortality is greater among women. So far as the enquiries 
went, it appeared that paralysis prevailed much more among 
those engaged in intellectual pursuits, than in those who live by 
manual labor. Dr. Granville is of opinion, that in all cases of so- 
called sudden death there has been previous disease, of which 
death is only the natural termination. Healthy persons are not 
struck down dead in an instant, but there has been " a prepara- 
tion, more or less antecedent to the occurrence which must 
inevitably have led to it, unless interfered with by a timely and 
successful watching on the part of the medical attendant. . . . 
The event was only the natural termination of an inward state of 
things which insidiously and unsuspectedly was preparing the 
blow."* 

Mr. John Reid, a surgeon in Glasgow, and the author of the 
Philosophy of Death, has laid down a theory which appears to 
have had a great show of truth about it. He says, "there is no 
general law of mortality arising from the physiological functions 
of the animal system, excepting that resulting from the limit of 
structural endurance: an organ may be destroyed in the first 
week of life from some excited disease, which, apart from that, 
might have remained entire, say, to the age of 100 years. Disease 
is only an accidental occurrence to an individual / for even the 
fact of 3,900 children dying the first five years, out of 10,000 
born, only shows that all these children have become accidentally 
diseased, or have otherwise met with their death. But it may be 
said, that such a great proportion dying in infancy and early 
childhood, must be owing to a vital or physiological cause ; or, 
in other words, that those who have died in early life must have 
been prone to disease. Such an inference," he replies, " is not 
admissible, because, if the child live for any length of time appa- 
rently in a healthy state, it must be Resumed that that child was 
bom with its vital organs in a fit state for living '." 

We may remark that this theory is the exact opposite of that 
advanced by Dr. Buchanan in his Physiological Law of Mor- 
tality, wherein he asserts that every child has, at birth, "the 
elements of its own decay." Mr. Reid replies, "A child at birth 
cannot contain the elements of its own decay, else every child 
would die, because of the presence of those elements, which is 
contrary to the fact. Life never comes to a ' spontaneous termi- 
nation] excepting as mentioned above, in some cases of extreme 
old age, death being the result either of violence, or of organic 
i, directly or indirectly excited in some organ.'''' 

* Sudden death of A. R Granville, M.D., 1854. 



HOURS MOST FATAL TO LIFE. 103 

Mr. Gompertz, whose name is intimately associated with the 
science of Life Contingencies, says hereon : — 

* 4 It is possible that death may be the consequence of two generally co- 
existing causes ; the one chance, without previous disposition to death, or 
deterioration ; the other a deterioration, or an increased inability to withstand 
destruction. If, for instance, there should be a number of diseases to which 
the young and old are equally liable, and likewise which should be equally 
destructive, whether the patient be young or old, it is evident that the deaths 
amongst the young and old, by such diseases, would be exactly in proportion 
of the number of young to the old, provided those numbers were sufficiently 
great for chance to have its play ; and the intensity of mortality might then 
be said to be constant, and were there no other diseases but such as those, 
life of all ages would be of equal value, and the number of living and dying 
from a certain number living at a given earlier age, would decrease in geo- 
metrical progression as the age increased by equal intervals of time ; but if 
mankind be continually gaining seeds of indisposition, or in other words, an 
increased liability to death, which appears not to be an unlikely supposition 
with respect to a great part of life (though the contrary appears to take place 
at certain periods,) it would follow that the number living out of a given num- 
ber of persons at a given age, at equal successive increments of age, would 
decrease in a greater ratio than the geometrical progression ; and then the 
chances against the knowledge of any one having arrived to certain defined 
terms of old age, might increase in a much faster progression, notwith- 
standing there might still be no limit to the age of man." 

Buffon says : — 

" When we reflect that the European, the negro, the Chinese, the American, 
the civilized and the savage, the rich and poor, citizen and peasant— otherwise 
differing so much from each other — are yet all alike in this, that the same 
measure, the same interval of time, separates their birth from their death — 
that difference in race, in climate, in food, in comforts, makes no difference in 
this common interval, we must acknowledge that the length of life depends 
neither upon habits, manners, nor quality of food ; that nothing can change 
the laws of the mechanism by which the number of our years is regulated." 

What that number or limit may be is not attempted to be de- 
fined, or indeed even hinted at. If the limit hz fixed, it cannot 
be within two hundred years, because we have numerous recorded 
deaths in this and other countries ranging up to that age : there- 
fore it may be that the causes enumerated operate to reduce the 
number reaching the limit, whatever that may be. That they do 
so, indeed, we shall hereafter offer abundant proof. The subject 
will be more fully entered upon in our remarks upon longevity. 

A writer in the Quarterly Heview gives the following curious 
particulars regarding the hours most fatal to life, or in less doubt- 
ful words, the hours at which the greatest number of deaths takes 
place. His observations extend over 2880 deaths at all ages, 
with a mixed population, and embraces a period of several 
years : — 

" If the deaths of the 2,880 persons had occurred indifferently at any hour 
during the twenty-four hours, 120 would have occurred at each hour. But 
this was by no means the case. There are two hours in which the proportion 
was remarkably below this — two minima, in fact — namely, from midnight to 
one o'clock, when the deaths were 83 below the average, and from noon to 



104 HOTTKS MOST FATAL TO LIFE. 

one o'clock, when they were 20f per cent, below. From three to six o'clock, 
a.m., inclusive, and from three to seven o'clock, p.m., there is a gradual in- 
crease in the former 23| per cent, above the average, and in the latter 5£ per 
cent. The maximum of deaths is from five to six o'clock, a.m., when it is 
40 per cent, above the average ; the next during the hour before midnight, 
when it is 25 per cent, in excess ; a third hour of excess is that from nine to 
ten o'clock in the morning, being 17-J above. From ten a.m. to three p.m. 
the deaths are less numerous, being 16£ per cent, below the average, the 
hour before noon being the most fatal. From three p.m. to seven p.m. the 
deaths rise to 5£ per cent, above the average, and then fall from that hour to 
eleven p.m., averaging 6£ per cent, below the mean. During the hours 
from nine to eleven o'clock in the evening there is a minimum of 6£ per cent, 
below the average. Thus the least mortality is during mid-day hours, namely, 
from ten to three o'clock ; the greatest being during early morning hours, 
from three to six o'clock." 

We shall conclude this part of our subject by noting a few of 
the causes which exercise an influence over the mortality returns 
other than have been already touched upon. These will be chief- 
ly comprised under the heads of violent deaths, suicides, deaths 
from starvation, &c. &c. The effects of consumption, cholera, 
fevers, and similar diseases, which also have an important influ- 
ence on the mortality returns, do not come within the range of 
our present purpose. 

We have it on the authority of the Registrar-General, that 
the violent deaths in England " appear to be nearly twice as fre- 
quent as in the other countries of Europe from which returns 
have been procured." Dr. Farr also speaks of them as being 
"on the increase in England." Hufeland, a half century ago, 
whilst recounting the various " enemies of life," noticed that the 
violent kinds of deaths swept off an immense number of man- 
kind, adding, "and these in modern times have unfortunately 
made great progress." In attempting a solution of the cause of 
this, he says, " Not only have a more enlarged spirit of enter- 
prise, the greater frequency of sea voyages, and more extensive 
trade multiplied such accidents, but people have fallen upon in- 
novations for accomplishing the object of shortening life in an 
incredibly quick and refined manner. I shall here mention only 
gunpowder and several new sorts of poison, such as aqua tofana, 
succession powder, &o. Nay, the art of hilling has nov> become a 
peculiar and exalted science," The careers of Palmer and Dove 
afford us recent proof of the skilfulness of two of its profes- 
sors. 

In 1853 — the most recent year for which we have returns at 
hand — the violent deaths from "evident external causes" were 
no less than 14,812— of these 10,725 were males and 4,087 to 
females. The total number was made up from the following 
causes; — 373 were the direct effects of intemperance, exclusive of 
509 deaths by delirium tremens, and other diseases which should 
properly be referred to this head. 78 deaths are attributed to 
want of food, 103 to cold, 21 to neglect, and 632 to the -want of 
breast-milk, the natural food of infants. By poison 409 persons 



VIOLENT DEATHS. 105 

died; by burns and scalds, 2.590; by hanging and suffocation, 
1,249; by drowning, 2,508; by wounds, 574 ; by fractures and 
contusions, 5,551 ; and by other violence, 724. Deaths by poison 
were less numerous in the two years, 1852-3, (779), than the two 
previous years, 1850-1, (899). 36 out of every 1,000 deaths were 
by violence, being at the rate of eight to every 10,000 living. 
The only class of violent deaths to Avhich females are more liable 
than males is burns and scalds — there being during the year 1853, 
1,377 casualties to the former, and only 1,213 to males.* 

Violent deaths appear to come almost equally under the law 
of average with those arising from natural causes : — here are the 
totals for six years : — 



1848. 


1849. 


1850. 


1851. 


1852. 


1853. 


13,551 


13,334 


13,987 


13,559 


14,475 


14,812 



The increase, however, in the last two years named, is very rapid. 
Again, the proportions occurring to the different sexes also pre- 
sent uniformity :— 

1851. 1852. 1853. 

Males 9,723, Females 3,836 Males 10,458, Females 4,017 Males 10,725, Females 4,087 

In 1849 the number was slightly below the average; but even 
in that year the following, amongst other items, stare us in the 
face : — 

Fractures and Contusions 4,170 

Burns and Scalds . . . . 2,761 

Drowning 2,433 

Hanging and Suffocation . . . . . . . . 1,069 

Wounds 542 

Poison 444 

It has been predicted, and it certainly is to be hoped, that by 
improvement in the education and industrial training of manual 
laborers, rendering them more discreet ; by improvement in the 
arts, rendering processes and engines more safe ; and by moral, 
religious, and physical training of intellectual laborers, render- 
ing tltem less liable to mental aberrations and suicides, the num- 
ber of violent deaths may be somewhat reduced. 

In many cases, this average of results strikingly illustrates the 
uniformity of operation of the human will. Take the case of 
Poisons ; the following figures are from the Registrar-General's 
returns : — 

DIED FROM POISON. 



Year. 


Males. 


Females. 


Total. 


Year. 


Males. 


Females. 


Total. 


1848 


308 


261 


569 


1851 


275 


253 


528 


1849 


290 


236 


526 


1852 


253 


300 


553 


1850 


304 


249 


553 


1853 


270 


219 


489 



Giving an average of 536 persons annually poisoned, being ten in 
every vjeek, or one in every 16 hours, " irrespective of those who 
die from the same means, and are registered with those who die 

* Vide 16th Report of Registrar-General. 



106 ACCIDENTS IN MINES. 

from * cause unknown,' * sudden death,' or by the ' visitation of 
God.' " Such a state of things is, to say the least, very start- 
ling. 

Murders, both in the numbers committed, and the manner of 
committing them, seem to be subject to the same law of average. 
Here are some statistics from M. Quetelet, quoted by Professor 
De Morgan, and relating to murders in France during the follow- 
ing years : — 

1826. 1827. 1828. 1829. 1830. 1831. 

Tot w^™ erera } 241 234 m m 307 m 

How committed : — 

By Fire-Arms 56 64 60 61 57 88 

Sharp Weapons of War.... 15 7 8 7 12 30 

Knives 39 .40 34 46 44 34 

Clubs or Sticks 23 28 31 24 12 21 

Stones. 20 20 21 21 11 9 

Sharp instruments not above) o^ a* jq 4* 40 aq 

Striking or Kicking 28 12 21 23 17 26 

Other modes, and unknown... 25 23 10 4 8 9 



Accidents in Coal and other Mines are liable to greater fluctu- 
ations. By the Parliamentary Blue-book, with the reports of the 
Inspectors of Coal Mines, to December, 1855, it appears that, in 
the three counties of Durham, Northumberland, and Cumberland, 
during the half-year ending 31st December, 1855, 79 accidents 
are reported, of which 18 were in shafts, 11 from explosions, 27 
from falls of stone and coal, and 23 from sundry causes. In 
South Durham, between December 31, 1855, and March 1, 1856, 
there were eight fatal accidents in collieries. In the Lancashire, 
Cheshire, and North Wales districts, 165 accidents occurred in 
1855, against 178 in 1854, and the number of lives lost in 1855 
was 199, against 299 in 1854. Twenty-nine of the accidents last 
year arose from fire-damp explosions. In the counties of York, 
Durham, Nottingham, Leicester, and Warwick, during the year 
ended 30th June, 1855, the number of accidents was 108, against 
113 in 1853-4, 119 in 1852-3, and 140 in the year 1851-2. In the 
half-year ending 31st December last, the number or' deaths was 
62, of which 10 were caused by fire-damp and suffocation. The 
report of Mr. T. Wynne, the Inspector of Coal Mines for the 
Staffordshire, Worcestershire, and Salopian district, for 1855, 
exhibits a lamentably heavy list of casualties producing violent 
deaths, confirming the opinion, by him formerly expressed, that 
"nothing but stringent legislation can stop the current of care- 
lessness and indifference to the loss of life that leads to so many 
fatal accidents." There were several explosions in the year, 
causing 38 deaths. The gross total number of accidents in the 
South Western district during the year 1855 amounted to 181, 
causing 200 deaths. Mr. Mathias Dunn, the Inspector of Mines 



INDIGENCE IN IRELAND. MORTALITY IN PRISONS. 107 

for the North of England, chiefly occupies himself with, tracing 
the causes of accidents. 

The deaths from indigence, or want of food, are happily not so 
numerous in this as in some countries. This is the more to be 
noted from the circumstance that the climate, as well as the 
occupations of the great body of the working classes, require a 
steady supply of nutritious food. In the southern parts of the 
continent of Europe, the poor live to a very great extent upon 
fruit of various kinds. In this country, too much fruit proves 
injurious to the health ; although, if properly dressed, we believe 
it might be used much more generally, with great advantage to 
the working classes. Fortunately for us, in this country, the 
curse of famine is now unknown. If our crops fail us, which 
happily is not often the case, our wealth still secures us a supply 
from more fortunate, but less opulent, countries. But can we pass 
by this fact without turning our thoughts to the Sister Isle ? The 
events of the last 15 years must be fresh in the memory of the 
youngest of us ; and not least among them stands the u Irish 
famine." The deaths from want of food in England are less, on 
an average, than 100 per annum: too large a number, truly, — 
but let us set in contrast the figures which the recently published 
report of the Irish Census Commissioners has brought again forci- 
bly before us. In 1842, the deaths from indigence in Ireland 
were 187. But from this date we may say, with a writer in the 

Times, " mark how the numbers rise In 1845, they were 

516; in 1846 they amounted to 2,041 ; in 1847 they reached the 
greatest height, 6,058 ; in the two following years together they 
amounted to 9,395, and so gradually diminished, although there is 
not much room, after all, for congratulation, seeing that, in the first 
quarter of 1851 — that year of grace, that annus mirabilis, which 
has been described as if it were the jubilee of the world — there 
were not less than 652 deaths attributed to starvation. In the 
whole period of ten years to which the census refers, the deaths 
of this class were 21,770, the sexes being in the proportion of 70 
females to 100 males."* 

There are other causes which undoubtedly exercise some, and 
perhaps a considerable, influence on the mortality of the king- 
dom, but cannot be classed with violent deaths or with suicides. 
These deserve a passing notice. The first which occurs to us is 
the increased mortality arising from confinement in prisons. We 
do not remember to have seen any English statistics on this par- 
ticular point, but it is stated on good authority that the ordinary 
mortality in the prisons of France is one in ticenty-three — a rate 
which corresponds to the age of 65 in the common course of life. 
In the vast majority of cases, however, the unfortunate victims 
of the law are no older than from 25 to 45 years of age. Taking 
them at the mean age of 35, it follows that the suffering from 

* 16th September, 1856.— Article on the Irish Census. 



108 SUICIDES. 

imprisonment, and from the causes that lead to it, is equivalent 
to 30 years' wear and tear of life.* 

We may next speak of mental suffering under this head. The 
effect of mental sufferings in accelerating the ratio of mortality, 
has attracted the attention of several writers. The Registrar- 
General, in his eighth annual report, says : — " The life of a man 
bears a certain proportion to its happiness. A miserable life is 
soon extinguished : violent lives end abruptly ; the life of a good, 
wise people approaches its natural term." On the same subject, 
Dr. Southwood Smith says : 

" It is impossible to maintain the physical processes in a natural and vig- 
orous condition if the Mind be in a state of suffering. The Bills of Mortal- 
ity contain no column exhibiting the number of persons who perish annually 
from bodily disease produced by mental suffering ; but every one must occa- 
sionally have seen appalling examples of the fact. Every one must have 
observed the altered appearance of persons who have sustained calamity. A 
misfortune that struck to the heart happened to a person a year ago. Observe 
him sometime afterwards ; he is wasted, worn, the miserable shadow of him- 
self ; enquire about him at the distance of a few months : he is no more." 

This leads us more particularly to the subject of suicides. These, 
unfortunately, do not appear to decrease with the progress of 
civilization, but rather to increase. Statistics of this class have 
not hitherto been well kept in this country. It may be stated, 
however, that the greatest proportion of our suicides are in the 
middle and upper classes ; hence, the poorer the district, the 
fewer the suicides. We do not know if this observation applies 
to other countries ; if so, it may perhaps go to explain a circum- 
stance which we have noticed in looking over various returns — ■ 
namely, that suicides are less general in Roman Catholic than in 
Protestant countries. We should be glad to meet with statistics 
more directly bearing on this question. 

The records of Insurance Offices could furnish much interesting, 
and perhaps useful, information regarding suicides in this country 
and America. Out of 330 deaths among the assurers in one 
office, during 26 years preceding 1831, eleven died by suicide, 
being 1 in 30 ; thereby "implying the existence of an appalling 
amount of mental suffering." Formerly, the Assurance Offices 
were gainers by suicides, except in cases of bona fide transfer of 
the policy to a third party, the policies becoming forfeited under 
the conditions. Latterly, a more generous spirit has been mani- 
fested by the Offices, and all the most liberal of them now agree 
to pay to the families of assurers the " surrender, or office value," 
of the policy the day before death took place. This is as it 
should be. We shall hope very soon to see it become the practice 
to pay to families the full amount of the policy where the same 
shall have been in force for a certain fixed period — say, two or 
three years. But we shall refer to this in another place. 

Some papers, published in the Assurance Magazine^ by Mr. R. 

* Smith's Philosophy of Health. 



STATISTICS OF SUICIDE. 



109 



T. Jopling, who has paid much attention to this branch of 
statistics, enable us to give a few curious particulars on the 
subject of death by suicide. It must be remembered that the fol- 
lowing figures apply to London only, and not to the whole 
kingdom. During the five years from 1846 to 1850, both inclu- 
sive, the total number of recorded suicides in London was 1,211, 
of which 819 were males, and 492 females. Thus, the annual 
average number was 242, and the proportion of females to males 
about 48 per cent., or less than one-half. The following Table 
gives the ages, in periods of five years, as well as the sexes of 
suicides : — 



Ages. 




Male. 


Female. 


Total. 


Ages. 




Male. 


Female. 


Total. 


9 durin 


g5 


years 2 





2 


50 to 54 during 5 


years 93 


30 


123 


10 to 14 


« 


3 


4 


7 


55 " 59 


" 


64 


25 


89 


15 " 19 


<c 


36 


44 


80 


60 " 64 


" 


58 


18 


76 


20 " 24 


« 


60 


45 


105 


65 " 69 


« 


36 


7 


43 


25 " 29 


" 


65 


51 


116 


70 " 74 


(i 


24 


9 


33 


30 " 34 


(( 


73 


40 


113 


75 " 79 


« 


7 


3 


10 


35 " 39 


" 


103 


38 


141 


80 " 84 


" 


9 


3 


12 


40 " 44 


" 


83 


41 


124 


Not stated 


" 


4 


2 


6 


45 " 49 


" 


99 


32 


131 













The ages at which the greatest number of suicides is shown are 
those between 35 and 40. The years in which the greatest num- 
ber took place were in 1846 and 1847 — the period of the Railway 
panic. It is not a little remarkable, however, that the increase 
was with the females, and not with the males.* It is also re- 
markable that while the proportion of crime is nearly five times 
greater in the male than in the female sex,f the proportion of 
suicides, as we have seen, is only twice as great. 

Mr. Jopling points out various other notable points in the 
statistics he furnishes. The suicides under 15, in both sexes, are 
comparatively nothing. The number among males is greatest 
between the ages of 65 and 75, and with females between 55 and 
65. For both sexes, between 15 and 85, the deaths by suicide 
are yearly 1 in 6,411 of the population of London. M. Quetelet 
gives us the means of comparison with other countries : — 



Annually. 
In Russia the suicides are 1 in 49,182 

" Austria 1 " 20,900 

" France 1 " 18,000 

" State of Pennsylvania 1 " 15,875 



Annually. 
In Prussia the suicides are 1 in 14,404 
" City of Baltimore . . 1 " 13,656 

" Boston 1 " 12,500 

" New York 1 " 7,797 



In and around Paris, the deaths from suicide between 1817 and 
1825 were, 1 in 2,400; in Berlin, from 1813 to 1822, 1 in 2,941; 
and in Geneva, from 1820 to 1826, 1 in 3,985 annually. It has 
been observed in Paris that suicide has regularly increased : from 
1829 to 1833 it was 1 in 1,666 ! Russia forms a striking example 
of little or no suicide, the deaths being only 1 annually in every 
49,182 of the population. It will be observed, however, that 

* Assurance Magazine : Vol. i. p. 310. 

t "Statistics of Crime," &c, by F. G. Neison, Esq. 



110 STATISTICS OF SUICIDE. 

suicide in large tracts of country is comparatively small— coufin- 
ing itself, in a great measure, to the large towns. Now, although 
Ave have in Paris 1 yearly in every 1,666 of the population, yet it 
will be seen that, in the whole of France, it is only 1 in 18,000.* 
The same reasoning will apply to England. 

There can be little doubt but that all the statistics published 
fall short of the actual occurrences, as they do not include deaths 
recorded under the head of "found drowned," or, indeed, any but 
ascertained suicides. In France, where more attention is paid to 
statistical information of all kinds than in this country, the causes, 
as well as the number of suicides, are frequently ascertained and. 
recorded. Mr. Jopling presents the following facts, collected in 
the Prefecture of the Seine, relating to 511 cases of ascertained 
suicide : — 

causes. Number. Per Centage 

of Totals. 

From love or wounded affections 100 20 

" disease, disgust of life, &c 148 29 

" an evil course of life — loss at play 69 13 

" distress, loss of employment, embarrassed affairs . . 100 20 

" unknown motives 94 18 

Totals . , .... . . 511 100 

It would seem that each sex has its peculiar method of termi- 
nating life. Of 812 male suicides observed upon, 312 (or 38 per 
cent.) were accomplished by hanging ; 219 (or 27 per cent.) by 
cutting throat and stabbing; 120 by poisoning; 87 by drown- 
ing; 53 by shooting; and 21 by throwing from heights. Of 
389 female suicides, the greatest number were committed by poi- 
son, viz., 115, or about 30 per cent. ; and hanging, viz , 109, or 28 
per cent. It would further seem that each country has also its 
peculiar method of terminating existence. Thus, out of 511 sui- 
cides committed in Paris, 65 were by falling from heights, 66 by 
strangulation, 45 by pointed and cutting instruments, 48 by fire- 
arms, 3i by poison, 86 by asphyxia from charcoal vapor, and 170 
by drowning ; this last method constituting 32 per cent, of the 
whole deaths, while in England the greatest number, viz., 27 per 
cent, of the suicides, were accomplished by hanging ! Mr. Jop- 
ling goes still further, and discovers that age has much to do with 
the method selected for self-destruction. Thus, in early life, 
" poisoning" seems to predominate ; next in order is drowning, 
" throat-cutting' 1 being close in its rear ; while in middle and 
later life " hanging" more generally predominates. The moralist, 
the physiologist, and the phrenologist may each find materials for 
reflection in the facts just detailed.f 

* Jopling. 

t For farther information on this topic, see Mr. Jopling's papers in the Assurance Maga* 
zine : Vols. 1 and 2. 



CHAPTER V. 

PROGRESS OF THE POPULATION 



The progress of the population is intimately associated with our 
present subject: the earliest writers, we have noticed in our his- 
torical division, appear to have discovered this association, and to 
have pursued it with avidity. Both Graunt and Sir William 
Petty were more curious than learned on the matter — as indeed 
was to be expected — they being pioneers in such inquiries. It 
was Dr. Milne (the compiler of the Carlisle Mortality Table) who, 
in his learned treatise on Annuities, first traced out this associa- 
tion in its more important bearings : and it was the want of a 
more complete knowledge of the laws of population that led Dr. 
Price into the commission of an error, which constitutes the great- 
est defect in the Northampton Table. On this point more will be 
said as we proceed. 

Parish registers, as we have already seen, were first kept in 
England in 1538, although in a very imperfect form ; and they 
were by no means general. However, out of about 10,000 parishes 
in England, it was found one-half possessed registers which were 
commenced prior to 1600 ; and of these, three-fourths were com- 
menced as earl y as 1570. From these registers Mr. Rickman was 
supplied with the number of births, marriages, and deaths for six 
periods, each embracing three consecutive years, from which he 
calculated the average population of each period. It was then 
assumed that the births, marriages, and deaths were in the same 
proportion to the population of each period as in 1801.* The re- 
sult of the estimate, prepared according to this mode of calcula- 
tion, showed that the population of England and Wales in each 
of the following years, was as under: — f 



Approximate Per centage of 

Year. Population En- increase during 

gland and Wales. each year. 
1570 4,160,321 

1600 4,811,718 151 

1630 5,600,317 16i 



Tear. 

1670 
1700 
1750 



Approximate 
Population En- 
land and Wales. 
5,773,646 
6,045,008 
6,517,035 



Per centage of 

increase during 

each year. 

3 

4f 

n 



From 1801 we have the correct population returns. These in- 
clude Scotland, but not Ireland, or the Isles in the British Seas. 

In 1801 the Population of England and Wales was 8,872,980 

Scotland 1,599,068 



In 1811 the Population of England and Wales was 
Scotland 



10,472,048 
10,150,615 

1,805,688 



11,956,303 
* National Encyclopaedia, art. Census. 
t In 1086 the population, according to Doomsday Book, was 1,000,000. Note, 1866. 



112 FIEST CENSUS IN IRELAND. 

The first census in Ireland was taken in 1813, but in a very im- 
pect manner : six counties, indeed, being altogether omitted. At 
the census of 1821, however, Ireland was properly enumerated, 
and we therefore now add the result to the other returns. Thus 
we have the following returns for each decennial period down to 
the present time : 

1821— England, Wales, and Scotland 14,072,331 

Islands of the British Seas 89,508 

Ireland .. .. .... 6,801^827 

Total, United Kingdom 20,963,666 

1831— England, Wales, Scotland, and British Islands . . . . 16,366,011 
Ireland 7,767,401 



24,133,412 



1841— England, Wales, Scotland, and British Islands . . . . 18.664,761 
Ireland . .. 8,175,124 



26,839,885 

1851 — England, Wales, Scotland, and British Islands, and Army, 

Navy, and Merchant Seamen, at home and abroad 21,121,967* 
Ireland ■. 6,553,357f 

27,675,324 

With these figures before us we are in a better position to un- 
derstand the relative, as well as the actual, progress which has 
been made. The late Mr. Porter (also of the Board of Trade) 
found the per centage of increase up to 1841, to be as follows:— 

England 33£ per cent. ; or nearly If per cent, annually. 

Wales. 27 " just above 1£ " 

Scotland ' 25$ " about 1£ 

Ireland .. .. .. 20£ " " 1 

United Kingdom . . 27 " above 1£ 

The annual rate of increase has varied in each decennial period. 
In fact, as the number of the population has increased, the rate of 
increase has declined. This, in a great measure, is the result of 
emigration ; the statistics of which are as follows : — From 1821 

* When we talk of the population of Great Britain being twenty-one millions, it is a 
very difficult thing to form an estimate of the magnitude of the numbers we speak of. A very 
ingenious computation has been hit upon, with a view of furnishing some aid in this particu- 
lar : If all the people of Great Britain had to pass through London in procession, four abreast, 
and every facility was afforded for their free and uninterrupted passing, during twelve hours 
daily. Sundays excepted, it would take nearly three months for the whole population of Great 
Britain to file through, at a quick march, four deep. To count them singly, at the rate of 
one a second, would take a year and-a-hulf\ assuming that the same number of hours daily 
were occupied, and that Sundays also were excepted ! In order to enumerate this mass in 
one day, 38,740 enumerators were, appointed, each having a given district allotted to him. 
92 tons of paper were used for schedules and enumeration books ; and the cost of the entire 
proceeding was £125,487, or not quite three halfpence per head of the population.— Vide Re- 
sults of the Census, by Edward Cheshire, a clever little publication, which rapidly passed 
through many editions. 

+ There appears to be some slight discrepancy with respect to Ireland, as we have seen 
the total numbers of the 1851 Census given at 27,724,849, from an official source ; while the 
English numbers remained the same as above given— discrepancy 49,525. 



DEDUCTIONS FROM THE CENSUS OF 1851. 113 

to 1831, 274,310 persons emigrated from the United Kingdom; 
in the years ending 1841, 717,913 persons emigrated, being nearly 
three times as many as in the previous ten years ; and in the ten 
years ending 1S51, the number reached to 1,693,516 ! being more 
than twice the number of the previous ten years, and six times 
the number for the period between 1821 and 1831. Emigration, 
therefore, considerably interfered with the numbers at the census 
of 1851. Still Great Britain showed an increase of 2,457,206 ; and 
if the increase continues uniformly at the same rate as it has done 
from 1801 to 1851, the population will double itself every 52^ 
years.* The combined effect of emigration and the famine in 
Ireland reduced the population of that island from 8,175,124 in 
1841 to 6,553,357 in 1851— difference, 1,621,767. The increase 
in the previous ten years was 407,723 ! 

The period at which the most rapid increase in the British pop- 
ulation has taken place — with the exception of the present time — 
was undoubtedly that from 1801 to 1821, when emigration was so 
small as to present no perceptible influence. The true test of an 
increasing population is where the births are found year by year 
to be greater than the deaths. Mr. Porter applied this test to the 
period of which we are speaking, and gave the following as the 
result : — 

Ten years preceding 1811 . . . Births, 1 in SI.— Deaths, 1 in 53 of the whole population. 
Ten years preceding 1821 . . . Births, 1 in 31.— Deaths, 1 in 60 " 

While for the next ten years, preceding 1831, he found the 
births one to 34 of the population only, and the deaths one in 58. 
There can be no doubt that he considerably understated the 
number or proportion of deaths, but as he would do so at each 
point of the comparison, it holds good for the purpose he inten- 
ded it. The deaths, notwithstanding all the improvement in 
mortality during the last half century, are now one in 45 an- 
nually. 

During the 50 years from 1801 to 1851 the annual average 
progress has been at the rate of \\ per cent. The progress of the 
sexes was very nearly equal, being just perceptible in favor of the 
females over the whole period. In the various decennial periods, 
greater variation was observable. If the same ratio of progress 
continue, the population of Great Britain will double every 52^- 
years. That of England and Wales every 51 years; Scotland 
making less progress. Dr. Farr says : — " The population of 
England has increased three-fold since 1751, and at such a rate 
that to every milllion men in 1751 there were 1^- millions in 1801, 
and 3 millions in 1851. In mere numbers, the nation of 1851 is 
equivalent to three of the Englands of 1751." 

It may be remarked that the progress of population proceeds 
at a compound ratio, and may therefore be likened to money im- 
proving at compound interest. A recollection of this fact is use- 

* Results of the Census— Cheshire. 



J 14 REMARKS BY THE CENSUS COMMISSIONERS. 

ful in estimating the time in which a population will double 
itself. If the increase be at the rate of 2 per cent, per annum, 
the numbers will be doubled in 35 years. If at 2^- per cent., 28 
years; or if at 3 per cent. — the rate at which London has in- 
creased of late — in 23-J- years. Money, improved at those rates of 
interest, will double in the like manner. 

The Commissioners appointed for conducting the Census of 
1851 directed particular attention to the question of the increase 
of the population, and the causes which had led to it, not only 
during the present, but previous centuries. They reviewed the 
results obtained by Mr. Rickman, and by comparing them with 
the computations of various early writers taking an interest in the 
subject, arrived at the conclusion that the population of Great 
Britain, and the Islands in the British Seas, was as follows in the 
middle of each of three centuries, — that for the present century 
being based on actual returns. 









Increase during 








two centuries. 


1651 


estimated population 


6,378,000 




1751 


" " 


7,392,000 


1,014,000 


1851 


enumerated population 


21,185,000 


13,793,000 



This return includes Scotland and the Islands of the British 
Seas, while Mr. Hickman's figures did not. His estimate in 1750 
was 6,517,035. 

They (the Census Commissioners) offer the following remarks 
upon the result of their inquiry : — " According to the estimates, 
the people of these Islands amounted to more than seven millions 
in 1751, and to more than twenty-one millions in 1851 ; they hav- 
ing increased nearly fourteen millions in the hundred years ; 
while the increase of the numbers in the preceding century 
(1651-1751) was only one million ; and the numbers can scarcely 
be wrong, either way, more than half a million." 

" To what," they ask, " is this remarkable multiplication of popu- 
lation in the last hundred years, and its previous slow progress, 
due ? Is it a simple question of supply and demand ? Is it some- 
thing fortuitous, and entirely inexplicable ? Is it the result of some 
simple change in the institution of families ? Or of some miracu- 
lous addition to the powers of population ? Undoubtedly, several 
causes have concurred in the creation and sustentation of twenty- 
one millions of people on Islands that have never before been the 
home of seven millions ; and several of these causes, although 
subsidiary, have been powerful in their operation ; but it is 
probable, from an examination of the facts, that a change in the 
marriage institution, and a great improvement in the character of 
the parents, have had the chief and most direct effect on the num- 
bers of their children now living." 

The first evident cause of the increase of the population is, they 
say, a diminution of the mortality. A cessation of the great 
plagues which devastated England in the 17th century was fol- 



REMARKS BY THE CENSUS COMMISSIONERS. 115 

lowed in the 18th century by a diminution of disease. The 
towns were improved, and the habits of the people became more 
cleanly — their food more suitable and varied. Medicine advanced 
rapidly after the discovery of the circulation of the blood by Har- 
vey, and of Sydenham's practical methods of treatment. Inoc- 
ulation was tried, and Jenner's discovery of vaccination secured 
the life as well as the beauty of the women from the ravages of 
small-pox, which was fatal, in 1695, to Queen Mary. The plague 
of Marseilles excited, in 1719, a salutary terror in England; 
and, among other useful sanitary publications, led to one of last- 
ing importance by the great Dr. Mead. The army in the war of 
1743-6 was followed to the Low Countries by Sir John Pringle, 
who successfully investigated the circumstances that affect the 
health of large bodies of troops on land ; while Captain Cook, in 
his voyages, showed how sailors, who formerly could not be kept 
alive or in health for two months in the Channel, might, by proper 
provisions and judicious arrangements, be carried round the world 
in safety. These important new doctrines and striking examples 
led to the amelioration of the prisons and other public institutions. 
They had some influence with the progress of the arts and sciences, 
on the municipal arrangements, and, through them, on the health 
of the general population. 

" The deaths," they continue, " first diminished proportionately, 
but it is to the increase of the marriages and of the births, as well 
as to improved manners, that we directly owe a large part of the 
accession of fourteen millions of people to the population of Great 
Britain, as will be rendered evident by an examination of the 
state of the population in the two periods ; an examination neces- 
sarily cursory, and referring simply to the most salient and 
accessible facts illustrative of the influence of manners on the 
increase of numbers, without any pretension on our part, as mor- 
alists, to censure the manners of the former, or to applaud the 
manners of the latter century. Such a state of the relations 
between the two sexes may be conceived as would, within certain 
limits, reduce or increase the number of births to almost any ex- 
tent, and it will be shown that the time, the energies, and the 
earnings of the people, which had in 1651-1751 been wasted in 
intrigues, in riotous assemblies, on gin, and in gambling, were 
devoted in the next century (1751-1851) to the establishment 
and support of quiet, industrious families."* 

The importance of the considerations embraced in the above 
observations must be our apology for quoting them so fully. 

These foregoing considerations range themselves chiefly under 
two heads or classes : first, the diminution of mortality ; and 
next, the increase of the powers of production. They each operate 
in the same direction, and when they combine, the progress of 
population is generally rapid. We shall first speak of increasing 
the powers of production, as, of the two, bearing most direct in- 
* Vide Census Report. 



116 ELEMENTS OP NATIONAL GREATNESS. 

fluence. We may, however, premise that the effects of improve- 
ments in medical science, the means by which epidemic diseases 
have been, and may yet be, further checked, together with the 
progress of sanitary science, will be fully discussed in our chapter 
on vital statistics, and will, therefore, only be glanced at general- 
ly here. 

It was a favorite maxim of Malthus, " take care of production 
— population will take care of itself " — which he afterwards ex- 
plained more fully in this wise, "the progress of population is 
almost exclusively regulated by the quality of the necessaries of 
life actually awarded to the laborer." Nearly all other political 
economists have concurred in this, or expressed similar views ; 
and nowhere have they been better expressed than by the 
learned Commissioners 1rom whom we have just quoted, and they 
also state the converse of the proposition : — 

" The numbers of the population are increased by an abundance of the ne- 
cessaries of life, and reduced by famines, epidemics, and public calamities, 
affecting the food, industry, and life of the nation. The pestilences of the mid- 
dle ages, the famine, the influenza, and the cholera of modern times — are ex- 
amples of one class of these agencies ; the security of freedom which England 
has latterly enjoyed is an example of the beneficial effect of another class of 
influences, not only on the happiness of the people, but also on the numbers 
which the country can sustain at home, and send abroad to cultivate, possess, 
and inherit other lands." 

Cheap food, the absence of epidemics and public calamities — in 
other words, "peace and plenty," a clean bill of health, and com- 
mercial prosperity, constitute the main elements of national 
progress. This proposition may be most readily confirmed by 
noting periods in our national history when any of the opposite 
conditions have existed. For these we need not travel beyond 
the record of our memory. The year 1847 occurs to us as an in- 
stance. That year brought about the greatest commercial panic 
of modern times. From £2 14s. 9d., in 1846, the price of wheat 
rose to £3 9s. 5d. in 1847; and see what followed. The marri- 
ages, from 145,664 in the former year, fell to 135,845 in the latter. 
The births, from 572,625 to 539,965. And the deaths rose from 
390,314 to 423,304 — an increase of no less than thirty-three thou- 
sand/ The influence of this one year of high prices and commer- 
cial adversity upon the population, cannot be estimated at much 
less than a quarter of a million. Well might the Registrar-Gen- 
eral point to these figures as exhibiting "the results of great pub- 
lic prosperity and adversity in strong contrast." 

A more recent instance is at hand — the causes different, the 
result the same. The Russian war commenced in 1854. The 
price of wheat in 1853 was £2 13s. 3d. per quarter, and the mar- 
riages in that year were 164,520. In 1854 the wheat rose to £3 
12s. 7d. — the marriages fell to 159,727. But the full force of the 
war was not felt till the following year. In 1855 wheat rose to 
£3 14s. 9d. — the marriages, sinking in an inverse ratio, only num- 
bered 152,113, being more than twelve thousand less than those of 



INFLUENCE OF THE PRICE OF FOOD ON POPULATION. 



117 



1853 ! The births of the two years remained about stationary, 
but what of the deaths? They rose in 1854 to 437,905. In 1855 
they were 425,703; but in 1856, when the war had ceased, and 
things assumed their accustomed course, they sank to 391,369 ! 

It may be said that these cases are exceptional. It would be 
well if they were so. We have, however, abundant and reliable 
proof to the contrary. Dr. Milne, with whom the reader has 
already become acquainted as the learned compiler of the Car- 
lisle Table of Mortality, gave many years of serious consideration 
to the causes which operate for and against the progress of pop- 
ulation. He arrived at the conclusion that the secret lay in the 
price of food — the price being regulated by the supply, and the 
supply affected by political causes, as peace and war, commercial 
prosperity or adversity. In support of his views, he prepared 
the following Table, confining it to the effects of peace and war, 
the great events of his time : — 

TABLE, 

Showing the influence of the Price of Food, as regulated mainly by a state of 
Peace and War, upon the progress of Population. 



1 

Year. 


Population. 


Increase. 


Died 1 of 


Wheat per Quarter. 




" 1780 


7,444,871 


42,665 


35i 


£1 15 8 


War «, 


1781 


7,491,240 


50,074 


36i 


2 4 8 


1782 


7,543,062 


53,569 


38£ 


2 7 10 




1783 


7,593,317 


46,941 


38i 


2 12 8 




r 1784 


7,641,855 


50,135 


37£ 


2 8 10 




1785 


7,704,434 


75,024 


38 


2 11 10 




1786 


7,782,777 


81,661 


40 


1 18 10 




1787 


7,866,395 


85,576 


40i 


2 1 2 


Peaces 


1788 


7,954,021 


89,676 


40i 


2 5 




1789 


8,045,078 


92,437 


41* 


2 11 2 




1790 


8,142,226 


101,860 


41| 


2 13 2 




1791 


8,242,082 


97,851 


42 


2 7 




„ 1792 


8,348,239 


114,464 


42 


2 2 11 




r 1793 


8,448,384 


85,826 


391 


2 8 11 




1794 


8,533,284 


83,973 


41 


2 11 8 




1795 


8,606,974 


63,408 


38f 


3 14 2 




1796 


8,685,507 


93,658 


m 


3 17 1 


War - 


1797 


8,786,911 


109,150 


m 


2 13 1 




1798 


8,900,484 


117,995 


45 


2 10 3 




1799 


9,014,341 


109,720 


45£ 


3 7 6 




1800 


9,102,470 


66,539 


m 


5 13 7 




1801 


9,158,908 


46,336 


m 


5 18 3 


Peace 


1802 


9,234,637 


105,121 


43f 


3 7 5 




f 1803 


9,351,437 


128,480 


43£ 


2 16 6 




1804 


9,496,290 


161,226 


49f 


3 1 




1805 


9,655,772 


157,737 


50i 


4 7 10 


War -< 


1806 


9,811,743 


154,206 


50f 


3 19 




1807 


9,963,082 


148,472 


48i 


3 13 3 




1808 


10,105,063 


135,490 


47f 


3 19 




1809 


10,249,941 


154,266 


50f 


4 15 7 




1810 


10,391,520 


128,891 


m 


5 6 2 



118 EFFECTS OF WAR AND POLITICAL EXCITEMENT. 

This Table requires and deserves careful consideration. As 
more particularly elucidating the purposes of its preparation, 
and the point we are now considering, we may point to the years 
which closed the last, and introduced the present, century. Com- 
mencing with 1799, we find the price of wheat £3 7s. 6d. ; the 
deaths in the proportion of 1 in 45^- of the living, and the increase 
to the population 109,720. In 1800 — the country having then 
been engaged in warfare for a period of eight years — wheat rose 
suddenly to £5 13s. 7d. ; the deaths followed suit, and increased 
to the ratio of one in 41-J-, or 26 per cent. 

With that impartiality, however, which is the characteristic of 
great minds, Dr. Milne reminds the reader : — 

" That, although the progress of the population is evidently influenced by 
every considerable variation in the price of wheat, it does not exactly corre- 
spond with it ; and small variations in the price are sometimes accompanied 
by alterations in the progress of the population in the inverse order of that 
which generally obtains. An instance of this occurs in making the compari- 
son between the years 1795 and 1796, when, although the price rose 3s., the 
annual marriages increased 4,000, the conceptions 12,000, and the deaths de- 
creased 20,000." But, he adds, " the returns of epidemical diseases, especially 
the small-pox, may also ham had a sensible influence in deranging the corre- 
spondence between the progress of the population and the supply of food." — p. 
394-5. 

We have only to look across the Channel to behold a striking 
instance of the combined effects of political excitement, scarcity, 
disease, and war. We are all familiar with the events of 1847 
in France. Are we all prepared to hear that the excess of births 
over deaths fell from 237,000, in 1846, to 62,000 only in 1847? 
Scarcity lent its aid to political excitement to bring about this 
result. Even this small excess was, by reason of cholera, in 1849, 
reduced to 13,000! A slight improvement then took place, but 
things grew worse again after 1851. By 1854-5, the double in- 
fluence of scarcity and war were at work, and, for the first time 
in the history of that country, the deaths exceeded the births. The 
result altogether has been, that for the five years ending 1856, 
the population of France has only increased 256,000 against 
1,170,000 in the previous five years.* 

The mention of political excitement carries the memory back 
to 1832, when the subject of the "Reform Bill" was in agitation 
throughout the length and breadth of the land, but more particu- 
larly in London. Do we find any perceptible difference in the 
mortality returns ? Let the reader judge for himself: — 

Deaths in London for a period of 10 years. 

1824 20,237 1829 23,524 

1825 21,026 1830 26,643 

1826 20,758 1831 25,337 

1827 22,292 1832 28,606 

1828 21,709 1833 26,577 

* Vide Times, 10th April, 1857. 



EFFECT OF EDUCATION ON MORTALITY. 119 

We do not want to go further. The deaths of the " Reform 
year" in London alone were 3,229 more than those of the year 
which pi#ceded, and 2,029 more than the year which followed. 
The population was increasing about that period at the rate of 3 
per cent, per annum. 

While we believe an abundance of cheap food to be essential 
to the progress of population, we by no means advocate luxurious 
living, in the sense in which it is generally understood ; for that, 
undoubtedly, has an opposite tendency. We want no other 
proof of this than to contrast the average numbers of the families 
of the wealthy classes as against those of the peasants and the 
industrious classes generally. This every reader can do from his 
own personal knowledge. Nor are luxuries at all productive of 
long life — in fact, nearly all the recorded instances of extreme 
longevity point in an opposite direction. There is no class of 
men in this country, which for many years, has fared worse than 
the Dorsetshire agricultural laborers, and there are few classes of 
persons who experience a more favorable rate of mortality; it 
being, at the ages from 20 to 40, less than 1 per cent, per annum. 
We laugh, as well we may, at the laws enacted by our forefathers 
to restrain luxury of living, knowing, as we do, that they too fre- 
quently sprang from envious and corrupt motives. Why, in the reign 
of Edward III. — 500 years ago — no man with an income under 
£100 per annum was allowed to wear gold, silver, or silk on his 
clothes ! Servants were also prohibited eating flesh meat or fish 
above once a day, and no one was allowed, either for dinner or 
supper, above three dishes in each course, and not above two 
courses.* And all this by Act of Parliament ! Such restrictions 
are no longer enforced, for moderation, alike in eating, drinking, 
and dress, has become an acknowledged virtue. 

Having glanced at the causes which operate for and against 
the productiveness .of the population, we may now look to some 
of those which lessen, or tend to lessen, the rate of mortality. 
We have more than once referred to the fact that the mortality 
of the kingdom has been steadily improving during the past 
century. Dr. Milne (writing about 1815) said, "Among the 
causes which have contributed to the gradual reduction of the rate 
of mortality in England and Wales during the last 40 or 50 years 
there is reason to believe that the education of the common people 
has been one of the most powerful" Dr. Adam Smith, in his 
Wealth of Nations, had previously pointed out that the influence 
of the division of labor, consequent upon the advancement of 
manufactures, unless counterbalanced by education, would have a 
tendency to produce a " drowsy stupidity," and to " benumb the 
understanding" of "the inferior ranks of the people." With every 
desire to award to the influence of education all that its most 
ardent admirers — with whom we claim to rank — can establish in 
its behalf; and a sincere wish that it had more effectually 

* Wade's British History. 



120 THE LIFE OF GENERATIONS. 

removed that " drowsy stupidity," which induces, or at least 
permits, the industrious classes to live in localities surcharged 
with the elements of disease and premature death — we fear we 
must look to other remedies than education, in the ordinary sense 
of the term, can be expected to furnish. We must now glance at 
the evils which remain to be removed. 

The annual rate of mortality in the country — that is, in small 
towns and villages^is now about 20 in 1,000, on an average; but 
in large towns it is 26 to the 1,000, or very nearly one third more. 
There are in Great Britain 815 towns of various magnitudes — 
580 in England and Wales, 225 in Scotland, and 10 in the 
Channel Islands. About one half of the population, however, 
reside in what may be called large towns ; it is, therefore, 
"evidently a matter of the first importance to remove those evils 
which weaken the strength of a town population, and hasten 
them to a premature grave." A powerful writer in the Times has 
declared this to be the great moral to be learned from all our 
statistical returns; urging that England is every day becoming 
more and more a huge aggregation of urban communities ; and 
that, although the wonderful physical constitution of the race 
enables it to struggle against deleterious influences, it is unwise 
to trust the policy of non-interference too far. The nation, as a 
whole, is bound to provide for the healthy growth of its children, 
and if due pains be taken to construct and cleanse our over- 
increasing cities, we may hope for a long duration of such pro- 
gress as is indicated by the more recent returns of the Registrar- 
General. 

The Census Commissioners did not fail to point out that the 
prolongation of the life of generations, as well as the increase of 
births, tends to increase the numbers living at one time ; that is, 
the numbers of the population. Thus, of 100,000 children born 
at Liverpool, only 44,797 live to the age of 20, while in Surrey 
that age is attained by 70,885 out of the same number of children 
born : the probable lifetime is about 6 years in our unhealthiest 
towns — 52 years in Surrey, and other comparatively healthy 
parts. In Manchester, where the mortality is higher, 100,000 
annual births only sustain, at the ages 20-40, a male proportion 
of 38,919 ; while in all England and Wales, where the mortality 
is now much lower, the same number of births produces a constant 
force of 61,215 men at that age; and at other ages similar 
disparities in the number living exist. Now, they add, the 
mortality was not much less in all England formerly than it is 
now in Manchester ; and the great diminution in the mortality 
of England evidently took place at such a period of the last and 
present centuries as left proportionately more survivors, at the 
ages 20-40, in 1851, than at the corresponding ages in 1821, for 
the dangers and loss of life incurred by the generations born in 
the 20 years, 1781-1801, were greater than those which were en- 
countered by the generations born in 1811-31. 



INFLUENCE OF OCCUPATION. 121 

VYe may observe here that Mr. Porter laid it down as a rule 
that the proportionate number of children born in any country 
could not be taken as a test of the condition of the people as to 
numbers ; for, he continues : — 

" It is well known that in climates where the waste of human life is exces- 
sive, from the combined causes of disease and poverty affecting the mass of 
the inhabitants, the number of births is proportionately greater than is expe- 
rienced in communities more favorably circumstanced. Frequently, and 
indeed almost always, in old settled countries, the proportionate number of 
births decreases with the advance of civilization, and the more general diffusion 
of the conveniences and luxuries of life. In fact, he adds, "the population 
does not so much increase because many are born, as because few die." 

The proper test is therefore that which the Census Commis- 
sioners have adopted ; namely, the number of persons which a 
given number of births will sustain at the several ages through 
lite. 

Mr. Sang, indeed, takes an exception in favor of early deaths, 
arguing that they indicate an increasing population rather than 
otherwise. Thus, he says : — 

" Whenever we have an increasing population, the ratio of early deaths to the 
total number of deaths is necessarily higher than its ratio to the number born, 
and thus a large proportion of early deaths is in some degree an index to the 
increase of the inhabitants. This is very conspicuous in the return before us ; 
thus out of 1000 deaths in the undermentioned localities, we have the follow- 
ing proportions occurring in the first year : — 

Manchester and Salford . . 263 I Leeds 278 

Liverpool 257 | Birmingham 245 

England and Wales 214. 

The large proportion of early deaths, he adds, " is thus no 
index to the unhealthiness of the district, unless it be accompanied 
by a true census of the inhabitants." 

The Registrar-General goes more to the root of the question. 
He says, in his Sixteenth Report, that the deaths of 17 persons in 
1,000 may be considered, in our present imperfect state, natural 
deaths; and all the deaths above that number may be re- 
ferred to artifical causes. He refers to a previous report (the 
15th) where he had shown that licensed victuallers, butchers, 
miners, bakers, shoemakers, tailors, and laborers (not agricultural) 
experienced a much higher rate of mortality than farmers; and 
added : — 

" The unhealthy occupations of the people, therefore, contribute to raise the 
annual mortality above the rate of 17 in 1000. Where the women are em- 
ployed in any but domestic labor, they discharge the duties of mothers imper- 
fectly, and the mortality of their children is high. The children in the mining 
districts, in the straw-plait and lace districts, and in the factory districts, suffer 
evidently from the want of wise, assiduous maternal care. The marshes in 
low ill-drained districts raise the mortality above 17 in 1000. Thus in Ely, 
Whittlesea, Wisbeach, and North Witchford, four thinly-peopled marshy 
districts of Cambridgeshire, round the Wash, the mortality was at the rate of 
23, 25, and 27 in 1000. The districts on the lower portions of the Thames 
suffer from marsh diseases. All our dock-yards, except Pembroke, are on 



122 INFLUENCE OF OCCUPATION. 

•unhealthy sites. One of the greatest and most prevailing causes of ill-health, 
and of the deaths in excess of 17 in 1000, is the condensation of people in 
towns, without the requisite mechanical and chemical arrangements for re- 
moving concentrated impurities, for supplying pure water, and for introducing, 
through large streets, free currents of pure air. To be beyond the reach of 
these causes, this population must be distributed on higher grounds, over 
wider spaces, on which the sun can shine and the breezes of heaven blow : 
proper sanitary arrangements must be made, and energetic means be adopted 
to obviate by art all the artificial disadvantages of life in cities." 

We see, then, that in order to grapple with the evils which now 
exist, as affecting the prolongation of life, physical, rather than 
general, education is required. Even this could not entirely 
remedy the influence of occupation, however much it might, and 
would, overcome that of locality; for, as Dr. Farr has remarked, 
with his usual clearness, the occupations of men in towns are 
mostly carried on in-doors, often in crowded workshops, while 
the agricultural laborer spends the greater part of the daytime 
in the open air. From the nature of the particles of animal 
matter thrown into the atmosphere, it is impossible to place the 
artizan in circumstances as favorable as the laborer ; the sun and 
wind destroy and waft away the breath as soon as it is formed ; 
but in the workshops of towns the men are shut from the sun, and 
no streams of the surrounding air carry off the steaming and 
perspiration, so that the mortality of working men in the metroplis 
is much greater than the mortality of women at the corresponding 
ages. This fact induced him, in estimating the effects of density 
of population in districts, to take examples from observations upon 
females. 

We believe that an acquaintance with the preceding facts and 
considerations cannot fail to be productive of good. By the aid 
of such knowledge the insurance agent possesses a ready means of 
opening up topics of conversation which, while they are of them- 
selves interesting to his auditors, may at any moment be extended 
to the purpose more immediately before him, viz., the many 
dangers by which life is surrounded — its consequent uncertainty ; 
and hence the necessity of making suitable provision for such 
emergencies. That Life Assurance affords the greatest facilities 
for accomplishing this, any intelligent agent should be able to 
show ; and we purpose, hereafter, to furnish some useful practical 
illustrations on this point. 



CHAPTER VI. 

RESULTS OF THE CENSUS. 

The beneficial results, accruing from a proper enumeration of 
the people, present themselves in such a variety of forms, that we 
shall only attempt to point to a few of them. In every branch 
of inquiry connected with the science of life contingencies, the 
advantages have been inexpressibly great. Observations which 
were before limited, and subjected to distortion by local influen- 
ces, have now become extended and corrected. Inferences, before 
doubtful, have now become strengthened and confirmed, and facts 
once confined to the knowledge of a few, have at length become 
popular and instructive. As an instance, we have already seen 
one of the best statistical writers of his day, Mr. Porter, late of 
the Board of Trade, speaking of the deaths in 1821 as bearing the 
proportion of only 1 in 60 of the living, and drawing conclusions 
therefrom, while with all the improvement which has taken place 
since that period they are now 1 in 45, and must have been still 
more frequent at the period spoken of. Another great advantage 
is that these returns enable us to test our own internal strength, 
or in other words the strength of the nation. We are thus 
enabled to contrast our position with that of other countries, and 
to furnish conclusions and deductions for the statesman as well as 
the political economist. 

We have already seen that it was only at the commencement 
of the present century that these periodical enumerations were 
introduced into this country. Nearly every Europen state — with 
the exception of Turkey! — now has a census of its population 
taken with more or less accuracy, and at periods more or less 
remote. With some few exceptions — and until quite recently 
Scotland and Ireland might rank with these — they all have a 
perfect system of registering every birth, marriage, and death. 
In countries where the representative system is wholly, or partly, 
based on numbers, as in the United States, a correct system of 
enumeration is almost indispensable. There is one peculiarity 
about the continental enumerations, or some of them — France and 
Russia to wit — they do not record the ages of the living. With 
us this is made an especial point, and many interesting and 
important deductions may be drawn therefrom, in proof of whicli 
we may quote the following passage from the report of the 1851 



" Mr. Rickman noticed, that in 1821 and 1831, the number of males in 
Great Britain under 20 years of age and the number above 20 were nearly 
equal. The Census of 1851 reveals a very different state of things. The 
increase in the young population (under 20) since 1821 has been rather more 



124 FACTS DRAWN FROM THE CENSUS. 

than 5,000,000 ; the increase in the adult population (above 20) has been more 
than 4,000,000. The males at the soldier's age of 20 to 40 amounted to 
1,966,664 in 1821, and to 3,195,496 in 1851 ; the increase in the 30 years is 
equivalent to a vast army of more than 1,200,000 men. While the population 
under 20 increased 37 per cent., the population between 20 and 40 increased 
60 per cent. Assuming, as may be fairly assumed, that the population under 
the age of 10 years, and the great bulk of the population of the age of 70 and 
upwards, are chiefly sustained by the industry of the population living in the 
middle period of life, extending from the age of 20 to the age of 60, it will be 
found that in 1821 the 6,367,991 persons of the middle age sustained 4,855,166 
children and old persons, or 68 percent., of their own number ; while in 1851 
only 5,797,225 ineffectives by age (57 per cent.) were sustained by 10,082, 296 
of effective population. Tested by these facts, the strength of the nation has 
increased faster than its numbers." 



In the census returns of 1851, or rather the report founded upon 
them, there is a great deal of information that is more curious 
than useful, or perhaps we should say, that combines both these 
qualities. Here are some facts illustrative alike of the facilities 
of locomotion, the requirements of commerce, and the wealth and 
intelligence of the people, as illustrated in their love of foreign 
travel. There were absent from Great Britain and Ireland, on the 
31st March, 1851, about a quarter of a million of persons. This, 
indeed, included the army, navy, marine and merchant service, 
numbering 162,490 persons belonging to England, and 49,704 
belonging to Ireland; but still leaving no less than 33,775 British 
subjects resident or travelling in foreign countries, and these 
were thus distributed : — In Fiance, 20,357 ; Belgium, 3,828 ; Rus- 
sia, 2,783 ; Two Sicilies, 1,414; Turkey, 1,235; Sardinian States, 
1,069; Greece, 1,068; Mexico, 755; China, 649; Saxony, 321; 
Alexandria, 155 ; Cairo, 85 ; Persia, 33 ; Tripoli, 23. 

Then we are told where the people at home were born, of 
whom, after the above deductions, there were 20,959,477. Of these, 
17,234,490 were born in England and Wales, 2,754,360 in Scot- 
land, 122,808 in the Islands of the British Seas, 733,866 in Ireland, 
41,316 in the British colonies, and 72,637 abroad ; 12,774 of the 
latter being British subjects. Of foreigners in Great Britain there 
appeared to be, 56,665. 

Also, that the number of separate families in Great Britain, was 
4,312,388, averaging nearly Jive persons to each family. That 
there were 3,648,347 inhabited houses, averaging more than 5^- 
persons to each house. The inhabited houses have nearly dou- 
bled during the past half century, and upwards of two millions 
of new families have been founded ! Notwithstanding this there 
were no less than 1,413,912 bachelors between 20 and 40 years 
of age, and 1,407,225 spinsters of the same age — to say nothing of 
three hundred and fifty-nine thousand, nine hundred and sixty- 
nine old maids above 40 years of age ! 

We also learn a good deal about the occupations of the people 
— which may be turned to good practical account by the life 
Offices — more especially by those transacting industrial business ; 



OCCUPATIONS OF THE PEOPLE. 



12, 



also by the " class offices." The following is a list of the occupa- 
tions in which more than 20,000 persons were engaged in 1851 : — 

Agricultural laborers, farm servants, shepherds . . . . 1,460,896 

Domestic servants .. .. .. 1,038,791 

Cotton, calico manufacture, printing, dyeing .. .. 501,465 

Laborers (branch undefined) . . . , 376,551 

Farmers, graziers . . . . . . 306,767 

Boot and shoe-makers . . . . 274,451 

Milliners and dress-makers . . . . 267.791 

Coal-miners 219,015 

Carpenters, joiners .. .. .. 182,696 

Armv and navv (exclusive of Indian army and navv) . . 178,773 

Tailors .. 152,672 

Washerwomen, manglers, laundry-keepers . . . . 146,091 

Woollen-cloth manufacturers 137,814 

Silk manufacture 114,570 

Blacksmiths 112,776 

Worsted manufacture . . . . . . 104,061 

Masons, paviors . . . . . . . . . . . . 101,442 

Messengers, porters, and errand boys . . . . . . 101,425 

Linen and flax manufactures . . . . . . . . . . 98,860 

Seamen (merchant service) on shore or in British ports . . 89,206 

Grocers 85,913 

Gardeners 80,946 

Iron manufacture, moulders, founders . . . . . . 80,032 

Innkeepers, licensed victuallers, beer-shop keepers . . 75,721 

Sempstresses, shirt-makers 73,068 

Bricklayers 67,989 

Butchers, meat salesmen 67,691 

Hose (stocking) manufacture 65,499 

Schoolmasters and mistresses 65,376 

Lace manufacture . . . . 63,660 

Plumbers, painters, glaziers . . . . . . . . . . 62,808 

Bakers 62,471 

Carmen, carriers, carters, draymen 56,981 

Charwomen . . . . . . . . . . . . . . 55,423 

Drapers (linen and woollen) .. .. 49,L84 

Engine and machine makers 48,082 

Commercial clerks 43,760 

Cabinet-makers, upholsterers 40,897 

Teachers (various) governesses . . . . . . . . 40,575 

Fishermen and women 38,294 

Boats, barges — men and women 37,683 

Millers 37,268 

Earthenware manufacture 36,512 

Sawyers 35,443 

Railway laborers 34,306 

Straw-plait manufacture . . 32,062 

Brick-makers, dealers 31,168 

Government — civil service . . . . . . . . . . 30,963 

Hawkers, pedlars . . . . . . . . . . . . 30.553 

Wheelwrights 30,244 

Glovers 29,882 

Shopkeepers (branch undefined) . . . . . . . . 29,800 

Horsekeepers, grooms (not domestic) jockeys . . . . 29,408 

Nail manufacture . . . . « . . . . . . . 28,533 

Iron miners 28,088 

Printers 26,024 

Nurses (not domestic servants) , 25,518 



126 PROPORTION OP MALES AND FEMALES. 

Shipwrights, shipbuilders 25,201 

Stone quarriers 23,489 

Lodging-house keepers 23,089 

Lead miners . . . . . . 22,530 

Copper miners 22,386 

Straw-hat and bonnet makers 21,902 

Coopers 20,245 

In the list of the occupations of women there were 88 author- 
esses, 18 editors and public writers, 643 actresses, 135 danseuses, 
16 equestrians. Of the female domestics, no less than 6*75,311 
were entered under the denomination of " general servants." Of 
the higher class of servants, the housemaids were more numerous 
than the cooks, the former being 55,935, and the latter only 
48,806 ; and there were above 50,000 " housekeepers," and near- 
ly 40,000 "nurses ;" not to mention 55,423 " charwomen." 

The excess of females over males has already been remarked 
upon, as well, as their greater duration of life. This excess ap- 
pears not only to apply to England, but to be almost a universal 
law, as far as returns have at present been obtained. The excep- 
tions will be newly-peopled countries, where the chief immi- 
grants are males. Dr. Farr has obtained and compiled the 
following returns — they relate to the " seven great powers " of 
the world : — 

Date of Census. Males. Pemales. Totals. 

England 1851 13,687,545 14,137,729 27,825,274 

France 1831 17,794,964 17,968,206 37,783,170 

Turkey 1844 17,533,124 17,816,876 35,350,000 

Austria 1840 18,202,631 18,747,770 36,950,401 

Prussia 1849 8,162,805 8,168,382 16,331,187 

Eussia 1855 33,448,093 33,989,414 67,437,507 

United States of America 1850 10,026,402 9,526,666 19,553,068 

In no case is the excess so marked as in England. In the 
United States the excess is the other way. But the most re- 
markable instance of the reverse of this rule was perhaps at the 
census of the colony of Victoria, in Australia, on the 26th April, 
1854. The total number of persons of all ages in the colony was 
236,798, of whom 155,876 were males, and 80,900 females — the 
disproportion being 193 males to every 100 females. If, how- 
ever, the observations be confined to ages under 15, the propor- 
tions right themselves, being 30,996 males and 30,383 females — 
a slight majority only in favor of males. In the regions of the 
gold-fields at Melbourne, there were 52,542 males and 14,152 fe- 
males. Scotland shows a greater proportion of females than 
almost any other country: they stood in 1851 in the proportion 
of 110 to every 100 males. In England, as we have seen, the 
proportion is 105 females to 100 males. 

This disparity is the more remarkable when it is remembered 
that in births the proportion of males is always the greatest. 
The circumstance is accounted for in two ways : first, that the 
mortality of males is greater by reason of their constant exposure 



DIFFERENCE IN MALE AND FEMALE LIFE. 



127 



to hazardous pursuits — the dangers of the army and navy, and 
the risk of residence in foreign climates — not to add another im- 
portant item — the numbers annually carried off by drinking. 
Secondly, inasmuch as the female duration of life is greater than 
that of the male, there will always be more of the former than 
the latter living out of any given number. 

Not only, however, is female life of longer duration than male 
life, but its epochs are differently marked. We believe it was 
Deparcieux who first noted this fact — his Tables were certainly 
the first to confirm the greater value of female life. We have 
somewhere met with the following just observations on this 
point, but do not remember their source : — 

" From a comparison of the ratio of mortality among the government males 
with that of the females, it is evident that there are few or no points of anal- 
ogy between the two. Differing in habits of life (continues the writer) almost 
as much as in organization, a correspondence a priori was not to be expected. 
And, while more regular habits of hfe in the female give her a superior 
vitality, the difference in organization gives rise to the different rates of mor- 
tality at particular ages. Thus, at 14, the mortality of the female, previously 
less, approximates very nearly to that of the male. That critical period over, 
the female life seems to rise in value with an elastic spring until 25, when a 
reaction takes place ; the impetus previously communicated losing its force 
with the lapse of years. The stream of life again begins to run with a 
stronger current about 35, and increases till the limit of 45, when natural 
causes again produce a languid flow, so that for a few years female life is 
actually inferior to male. After that period, as may be expected, it again 
rises in value, but shortly declines. For these reasons, we may hold that the 
ages of 14 and 45 are the two hinges upon which female life turns — its rise 
and decline being attributable to similar causes. There may, therefore (adds 
the writer), be some question as to the propriety of estimating female life, at 
all ages, by the same Tables which apply exclusively to male. If assurances 
are effected for the whole period of female life, the premiums should be less 
than for males of the same ages." 



A careful perusal of the following Table will confirm the 
soundness of these views. The figures apply to the years 1837 
and 1838, and show the computed proportions of males and 
females living in those years, at the different ages set forth in 
the first column. Particular attention should be paid to the vari- 
ation in the figures of the last column. 



Age 




Males. 


-p, , Excess of 
females. Females _ 


Age 




Males. ! 


Females Excess of 
bemaies. Fema]es> 


to 


5 1,177,419 1,201,944 


24,525 


55 to 


60 


254,862 


266,756 


11,894 


5 " 


10 


955,494 


986,812 


31,318 


60 " 


65 


206,984 


220,019 


13,035 


10 " 


15 


859,142 


888,751 


29,609 


65 " 


70 


158,684 


173,107 


14,423 


15 " 


20 


776,624 


800,449 


23,825 


70 " 


75 


111,601 


126,182 


14,581 


20 " 


25 


691,955 


710,826 


18,871 


75 " 


80 


69,768 


82,088 


12,320 


25 " 


30 


611,544 


626,081 


14,537 


80 " 


85 


36,351 


44,637 


8,286 


30 " 


35 


539,250 


549,829 


10,579 


85 " 


90 


13,689 


17,511 


3,822 


35 " 


40 


473,768 


482,059 


8,291 


90 " 


95 


3,534 


5,275 


1,741 


40 " 


45 


413,020 


421,420 


8,400 


95 " 


100 


693 


1,235 


542 


45 " 


50 


356,412 


366,178 


9,766 


100 " 


105 


117 


174 


57 


50 " 


55 


303,973 


314,997 


11,024 


above 105 


10 


28 


18 



Total, Males 8,014,894. Females, 8,286,358. Excess of Females, 271,464. 



128 EFFECTS OF TOWN AND CITY LIFE. 

The proportion of baptisms in England was as follows during 
the following years : — 

1821 1822 1823 1824 1825 1826 1827 1828 1829 1830 
Girls 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 
Boys 1048 1047 1047 1041 1049 1046 1047 1043 1043 1034 

In 1831 the births were : — 

Males . . . . 286,821 

Females 285,175 



Leaving the excess of Males . . . . 1,646 

which was very much below the average. Of these numbers 
39,990 males and 31,898 females died in the first year, being 
"not quite one-seventh of the boys and just one-ninth of the 
girls." So that by the end of the first year the girls had obtained 
a majority of 6,446.* The proportion of male births being un- 
usually small, and of deaths unusually large. 

The density of the population of cities has already been re- 
ferred to. The following calculation was made a few years 
since, with respect to the proportionate density of population in 
different countries : — 

Iceland 1 England 152 

Sweden 14 France 163 

Turkey 36 Upper Italy 172 

Poland 33 Naples 182 

Spain 63 Venice 196 

Ireland 99 Holland 124 

Switzerland 114 Malta 1103 

Germany . . . . . . . . 127 

Dr. Guy has deduced the following facts, bearing upon this 
point, from the Registrar's Returns : — Population in England to 
the square mile — country, 199; town, 5,100. Annual deaths in 
one million of the population — country, 19,300; town, 27,073; 
annual excess in town districts, 7,733. Rate of mortality — coun- 
try, 1 in 52 ; town, 1 in 37. General mortality — England, 1 in 45 ; 
Isle of Wight, 1 in 58 ; Anglesea, 1 in 62 ; London, 1 in 39 ; 
Leeds and Birmingham, 1 in 37 ; Sheffield, 1 in 33 ; Bristol, 1 in 
32; Manchester, (union,) 1 in 30 ; Liverpool, (parish,) 1 in 29. 
Thus the inhabitants of London, compared with England at 
large, lose eight years of their lives; of Liverpool, 19. The 
population of large towns, in England, being 4,000,000, the an- 
nual loss, by town residence, is between 331,000 and 332,000. f 
All towns, however, are not equally unhealthy : — 

Annual Deaths per 1000. 

In Liverpool . . . . . . . . . . . . 35 

" Manchester . . . . . . . . . . . . 32 

" Bath, Coventry, Derby, Dudley, Shrewsbury, and Sunderland 26 

" Carlisle and Norwich . . , . . . . . . . 25 

" Tynemouth . . . . . . . . . . . . 23 

" Halifax and Kidderminster . . . . . . . . 21 

* Sang, on Life Assurance. 

t For more recent information on this important question see Twentieth Report of Re- 
gistrar-General, p. 175. Note, 1866. 



ENGLAND, SCOTLAND, AND IRELAND. 129 

While town and city life appears so detrimental to the body, 
it does not seem to affect the mind so injuriously, except that un- 
due stimulation may be proved injurious. Dr. Guthrie, of Edin- 
burgh, has recently pointed out, in a very eloquent manner, that 
amidst the crowding and confinement of city life the mind finds 
its fullest and freest expansion. " Unlike the dwarfed and dusty 
plants (he says) which stand around our suburban villas, languish- 
ing like exiles for the purer air and freer sunshine that kiss their 
fellows far away in flowering field and green woodland, on sunny 
banks and breezy hills, man reaches his highest condition amid 
the social influences of the crowded city. His intellect receives 
its brightest polish where gold and silver lose theirs — tarnished 
by the searching smoke and foul vapors of city air. The finest 
flowers of genius have grown in an atmosphere where those of 
nature are prone to droop and difficult to bring to maturity. The 
mental powers acquire their full robustness where the cheek loses 
its ruddy hue, and the limbs their elastic step, and pale thought 
sits on manly brows, and the watchman, as he walks his round, 
sees the student's lamp burning far into the silent night." 

The results of the Census furnish us with the means of compar- 
ing and contrasting not only this country with others, but the 
peculiarities of different districts or portions of the kingdom. 
From the last Census Report we gather the following particulars : 

Scotland differs from England in the numbers, and in the den- 
sity of population ; the rates of the people's increase ; in the pro- 
portion of males and females; and in the proportion of men and 
women in the married state. In Scotland, there are 110 females 
to every 100 males at home ; in England and Wales, only 104 fe- 
males to 100 males at home. In Scotland, 49 women in every 100 
of the age of 20 and upwards are returned as wives. In England 
and Wales, 59 women in every 100 of the same age are married. 

In Scotland, the population has increased rapidly since 1801, 
and the increase in fifty years has been at the rate of 74 per cent. ; 
but in England the increase in the same time has been 97 per 
cent. The population of Scotland was to the population of Eng- 
land as 18 to 100 in 1801 ; and as 16 to 100 in 1851. 

The density of population in Scotland was such in 1851 that on 
an average there were 92 persons to a square mile/ while in Eng- 
land there are 307 persons to a square mile. The mean proximity 
of the people is such in Scotland that they are on an average 197 
yards apart. In England the proximity is 108 yards. 

Seven per cent., or 207,367 of the inhabitants of Scotland are 
natives of Ireland ; while 519,959, or three per cent, of the inha- 
bitants of England are natives of Ireland. There were in 1851, 
130,087 natives of Scotland in England, or 7 in every 1000 of the 
population of England; and 46,791 natives of England in Scot- 
land, or 16 in every 1000 of the population of Scotland. Scot- 
land has sent 47 per 1000 of its population to England; England 
and Wales 2 1 7 ¥ per 1000 of its population to Scotland. Scotland 



130 ENGLAND, SCOTLAND, AND IEELAND. 

maintains 2,922,362 people on 20,047,462 acres of territory, or 
nearly 7 acres per man; England has 18,054,170 people living on 
37,324,915 acres of territory, or little more than 2 acres each. 

"As the population in Scotland," say the Census Commis- 
sioners of 1851, "is to the population in England and Wales 
nearly as 1 to 6|, it is evident from the above numbers that the 
proportion of Englishmen in the population of Scotland is twice 
as great as the proportion of Scotchmen in the population of Eng- 
land. .Upon the other hand 130,087 Scotchmen had crossed the 
Tweed and entered England, while 46,791 Englishmen had passed 
the borders of Scotland ; so that of every 100,000 persons horn in 
England and Wales, 271 were found in Scotland, while of every 
100,000 persons born in /Scotland, 4,723 were enumerated in Eng- 
land ; and the tendency of the people born in Scotland to enter 
England has hitherto been seventeen times as great as the ten- 
dency of the English to enter Scotland." This is a result which 
the public generally will be prepared for. 

With respect to Ireland, the Census Report furnished many 
particulars painfully curious, as well as historically useful. These 
are ably condensed in the Athenceum of July 12, 1851, and we 
gladly avail ourselves of the writer's labors : — 

" Ireland has long been a mystery and an anomaly in the West of Europe. 
When it had existed for four centuries, in a chronic state of anarchy and re- 
bellion, the country was almost depopulated under the last of the Tudors and 
the first of the Stuarts. After the savage and sanguinary rebellion of 1641, it 
was conquered and chastised by Cromwell, as few countries in historical re- 
cords have ever been ; and in the next generation the arms of the Prince of 
Orange again swept the land of its ill-fated inhabitants. If the returns made 
by Sir William Petty and Captain Smith may be trusted, the population fell 
one-fourth between 1672 and 1695. During the 50 years then drawing to a 
close, a large and influential settlement of English took place in the North. 
Manufactures were introduced by these new and industrious settlers ; the old 
population was governed by the strong arm of authority ; and, strangely 
enough, after the war with William, as had been the case after that with 
Cromwell, the country rose out of its depth of poverty and misery ; agricul- 
ture and trade revived ; and the Counties of Ulster — hitherto a wild and de- 
solate region — began to assume something the appearance of Kent and Nor- 
folk. Between 1695 and 1754 the population increased from 1,034,102 to 
2,372,634. From this time there was a steady increase, the numbers for 1791 
being returned in the hearth-money estimates at 4,200,612 — and those in the 
first Census, that of 1821, at 6,801,827. From 1821 to 1831 the progress of 
the population was rapid in the extreme for Ireland — the rise being no less 
than 965,574 souls, or about 14 per cent, in the decade. This, however, was 
the period of greatest increase. Between 1831 and 1841 the sum total of the 
increase fell to 407,723, or about 5-£- per cent. In the last decade, just pub- 
lished in the Census Returns, we have the astounding result, not merely of a 
failure to maintain the old rates of progress, but of a vast positive decrease in 
the population. In 1841, the population of Ireland was, in round numbers, 
8,175,000 ;— it is now, for 1851, returned at 6,500,000. At first sight (adds the 
writer) these figures seem to tell an incredible tale. They startle belief by 
the novelty of the facts which they indicate. In the English mind, progress 
has become of late years an apparently fixed law of nature ; and on finding a 
bold and emphatic denial of that onward rule in close proximity to our own 
shores, and in a country bound to u$ by so many ties, we feel our ideas rudely 



THE UNFORTUNATE CLASSES. 131 

and painfully shaken In Ireland, not less than a quarter of the 

inhabitants has been cut off or removed in ten years, a fact with hardly a pa- 
rallel in history. Cromwell's destroying sword and inexorable policy were as 
nothing to the more effective causes which have recently been in operation. 
His stormings and forced expatriations cleared that soil of some thousands — 
the new victims of poverty, cholera, famine, fever, despair, and emigration, 
are to be counted by millions !" 

Happily, during the last few years, a change for the better has 
again set in. 

Other indications of misery present themselves. The returns 
of the Poor Law Board in the year 1851 gave the total number of 
persons receiving relief, as paupers, in England and Wales, at up- 
wards of 800,000. Of these, 126,488 were inmates of workhouses, 
being in the proportion of 1 in-door pauper to every 142 inhabi- 
tants — or 7 in every 1,000. In Scotland the number of paupers 
was 76,906 — of these, however, but 5,438 were receiving in-door 
relief. In England, the male paupers exceed the females ; in 
Scotland, the proportions are reversed. 

The unfortunates come under two classes — the " Homeless" and 
the " Houseless ;" and they fully illustrate a time-worn adage that 
one half the world does not know how the other half lives. Of 
the first of these classes there were, in March, 1851, 295,856 — 
two hundred and ninety -five thousand eight hundred and fifty -six 
persons living in the various hospitals, workhouses, barracks, 
prisons, asylums, and other charitable institutions of the country ; 
being in the proportion of 178,041 males to 117,815 females. 

The " Houseless" are divided into two sections : 1. Gipsies, 
beggars, criminals, and the like, together with some honest but un- 
fortunate people ; and 2. Persons in barges and in sea-going ves- 
sels in ports, or engaged in inland navigation. In 1841, the former 
class amounted to 22,303. In 1851, it happily only numbered 
18,249 — in the following proportions: — Sleeping in barns on the 
night of the Census, 7,251 males, and 2,721 females. Total in 
barns, 9,972. In the open air, or in tents, 4,614 males, and 3,663 
females, together 8,277, making up the 18,249 stated. Of the 
second class, there were in barges, 10,395 males, and 2,529 females, 
together, 12,924. In vessels in the ports, and engaged in inland 
navigation, 7,730 males, and 845 females, together, 8,575 ; and in 
sea-going vessels in the ports 41,165 males, and 2,008 females, to- 
gether, 43,173, making a total in the second class of 64,672 ; and 
a grand total of houseless people, 82,921 ! — being in the propor- 
tion of nearly seven males to one female. 

We reserve, perhaps, the most truly unfortunate class till the 
last. There were confined in the various lunatic asylums, and 
other institutions for the reception of the insane, in 1851, no less 
than 18,803 persons. Of these 8,999 were males, and 9,804 fe- 
males ; and lunatic paupers in workhouses were not included in 
these returns. 

The proportion which lunatics in asylums bear to the general 



132 



STATISTICS OF INSANITY. 



population of Great Britain is, 1 in every 1,115 inhabitants. To 
every 100,000 males, and 100,000 females living, there were 88 
males and 91 females in these institutions. By an examination of 
the former occupations of these unfortunate people, it will be seen, 
that the educated and professional classes furnish many cases of 
insanity. Of clergymen and ministers, 84 were returned ; barris- 
ters and solicitors, 88 ; physicians and surgeons, 108 ; officers in 
the army and navy, 95; the East India service, 118; schoolmas- 
ters and teachers, 258. Amongst the largest items are laborers, 
1,794 ; female domestic servants, 1,753 ; shoemakers, 364 ; weav- 
ers, 240 ; and tailors, 224. These figures, however, only apply to 
about half the number of sufferers, as in 7,674 instances the for- 
mer occupations were not returned. 

It is stated, on the authority of Dr. Andrew Halliday, that in- 
sanity has more than tripled within the last twenty years ! and he 
points to it as being more extensive in France, " in proportion to 
its population than in most other countries." 

Of one thousand male patients, insanity was supposed by another 
eminent authority, to be traceable to the following causes rela- 
tively : — * 



Drunkenness 110 

Consequences of disease . . 100 

Epilepsy 78 

Ambition 73 

Excessive labor 73 

Born idiots 71 

Misfortunes 69 

Old age 69 

Chagrin 54 

Love 47 



Accidents 

Religious enthusiasm 
Unnatural practices 
Political events 
Poisonous effluvia . . 

Ill usage 

Crimes, remorse and despair 
Pretended insanity 
Malformation of the skull 
Other and unknown causes 



39 

29 

27 

26 

17 

12 

9 

5 

4 



Speaking of idiots, as distinct from lunatics, the following 
figures represent the latest returns. In England, pauper idiots, 
or idiots protected in national institutions : — Males, 3,372 ; females, 
3,893. Total, 7,265. 

And this doleful picture brings to a close our remarks on the 
Census. 

* Vide Haydn's Dictionary of Dates. 



CHAPTER VII. 



LONGEVITY. 



Those who have written or thought much on the subject of 
longevity have, for the most part, become wonderfully enamored 
of their theme. They agree almost to a man that it is in our own 
power not only to prolong our days, but also greatly to increase 
our enjoyment of life. Cornaro, at the age of 85, writes, " The 
spirit increases in perfection as the body grows older." Fonte- 
nelle declared that the happiest years of his life were between the 
fifty-fifth and the seventy-fifth. Buffon, at the age of 70, as if ad- 
dressing himself to youth, says, " Every day that I rise in good 
health, have I not the enjoyment of this day as immediately and 
as fully as you have ? If I conform my movements, my appe- 
tites, my desires to the impulses of a wise nature alone, am I not 
as wise and more happy than you ? And the view of the past, 
which awakens the regrets of old fools, offers to me, on the con- 
trary, the enjoyments of memory, agreeable pictures, precious 
images, which are worth more than your objects of pleasure ; for 
they are pleasant, these images, they are pure, they call up only 
amiable recollections. The inquietudes, the chagrins, all the 
troop of sadnesses which accompany your youthful enjoyments, 
disappear in the picture which represents them to me. Regrets 
ought to disappear in like manner; they are only the last flashes 
of that foolish vanity which never grows old." " Patience," says 
M. Reveille Parise, " is the privilege of old age. A great advan- 
tage of a man who has lived long is that he knows how to wait. 
In the old man everything is submitted to reflection." "In 
youth," says M. Flourens, " the attention is quick, lively, always 
on the alert ; fixes itself on everything, but reflection is wanting. 
In manhood, attention and reflection are united, and this consti- 
tutes the strength of manhood. In old age attention lessens, but 
reflection increases ; it is the period in which the human heart 
bends back on itself, and knows itself best." Cicero also joins in 
the " sweet praises ;" and old Cornaro, more playfully than be- 
fore, adds, " and then how advantageous to live long, for if one 
is a Cardinal, he may become a Pope as he grows older ; if he oc- 
cupy a distinguished place in a republic, he may become its chief; 
if he be a learned man, or excel in any art, he may excel in it 
still more." 

" Long life," says Hufeland, the famous German physician, who 
flourished at the close of the last century, and from whose clever 
book, the Art of Prolonging Life, we shall have frequent occa- 
sion to quote, " has at all times been the chief wish, the principal 
object of mankind; but how confused and contradictory are all 



134 THE ART OF PROLONGING LIFE. 

the plans ever proposed for obtaining it ! The stern theologist 
derides such attempts, and asks if the period of existence is not 
determined to every human being — and who is able to add a 
hair-breadth to his stature, or a minute to the duration of his 
existence ? The practical physician exclaims, why do you search 
for the particular means of prolonging life ? Employ my art, 
take care of your health, guard against diseases, and cure those 
which have appeared. This is the only way to promote longev- 
ity. The adept shows his vital elixir, and boldly asserts that 
those who will persevere to take that incorporated spirit of life, 
may hope to become old. The philosopher endeavors to resolve 
the problem, by teaching men to despise death, and to double 
life by enjoyment. The innumerable legion of quacks and em- 
pirics, on the other hand, who have gained the confidence of the 
multitude, inspire them with a belief that there are no surer 
means of becoming old than to let blood at proper times, and to 
use cupping, purgatives, &c." 

He attributes this " love of life" to the influence of what he 
terms the vital principle, which pervades all nature, and is under 
the immediate influence of the Deity. " It need," he says, " ex- 
cite no surprise, therefore, that the most perfect possessor of this 
benefit should value it so highly ; and that the bare idea of living 
and existing should be attended with so much pleasure. To those 
even who are deprived of its comforts and enjoyments, to those 
who suffer under the pain of miserable disease, or who bewail the 
loss of freedom in the gloom of a dungeon, the idea of living and 
existing presents some charms ; and it certainly requires a de- 
rangement of the finest organs of sensation, a circumstance pos- 
sible only to man ; a total darkening and deadening of the mental 
faculties, to render life to us either disgusting or indifferent. . . 
It was very natural for men, therefore, to conceive the idea 
whether it might not be possible to prolong our existence, ancj. to 
give more extent to the too fleeting enjoyment of so valuable a 
blessing. This question, indeed," he continues, " has at all times 
engaged the attention of mankind, and in different ways. It has 
been a favorite object of the deepest thinking minds, and it has 
been a fine field for visionaries." 

In another place he remarks that we are continually surrounded 
by the friends and the enemies of life ; adding, he who keeps 
company with its friends will become old ; but he who prefers 

its enemies will shorten his existence The enemies 

of our life have, in modern times, dreadfully increased ; and that 
degree of civilization, luxury, refinement, and deviation from 
nature, in which we at present live, by so highly exalting our 
extensive life, tends also to shorten, in the same proportion, our 
existence. "We shall find," he says, "on close examination, 
that men appear, as it were, to have anxiously studied how they 
might deprive each other of life secretly and imperceptibly, and often 
in the most ingenious manner possible. Much more precaution 



THE THREE CELESTIAL GIFTS. 135 

and attention are therefore now necessary, in order to secure our- 
selves from danger." What these friends and enemies are will 
be indicated as we proceed. One of his conclusions indeed 
should be recorded without delay. It is that length of days can 
only be secured and enjoyed by leading a virtuous life. Listen ! 

" I can, at any rate, assert that man will in vain seek for the one without 
the other ; and that physical and moral health are as nearly related as the 
body and the soul. They flow from the same sources ; become blended to- 
gether ; and when united, the result is human nature ennobled, and 

RAISED TO PERFECTION." 

Hufeland speaks of light, heat, and air, as the " three celestial 
gifts, which with great propriety may be called the friends and 
guardian spirits of life," — and of darkness, cold, and a confined 
atmosphere, as possessing just the opposite qualities. " The life 
of every created being is the more perfect the more it enjoys the 
influence of light." Every man who passes his life in darkness, 
becomes pale, relaxed, and heavy, and at length loses the whole 
energy of life ; as is proved by the many melancholy instances 
of persons shut up in gloomy dungeons ; and he believes that 
" organized life impossible only under the influence of light, or in 
all probability through it." Cold, he speaks of, as " the great 
enemy of all life." " No being can live entirely without air ; 
and sudden, sometimes instantaneous, death is to most of them 
the consequence of its being withdrawn." " Water also," he 
says, " belongs to the agents friendly to life, so far as it contains 
oxygen ; and it certainly promotes life, for without fluidity no 
expansion of life is possible." 

These considerations lead us to the inquiry — What is Life ? 
Lord Bacon, in his great wisdom, compared it to aflame, which 
is continually consuming and consumed. Hufeland takes up the 
figure. " The process of life may, then, be considered as a con- 
tinued process of consumption ; and its essence may be defined 
an uninterrupted wasting and separation of ourselves. . . . De- 
structive and creative powers are engaged, with never-ceasing 
activity, in a continual struggle within us ; and every moment of 
our existence is a singular mixture of annihilation and new crea- 
tion. As long as the vital power retains its freshness and energy, 
the living plastic powers will have the superiority, and afford its 
protection in this contest : the body will also increase and ap- 
proach nearer to perfection. By little and little they will balance 
each other, and the consumption becoming equal to the renova- 
tion, the body will at length decrease. At last, the vital poioer 
being lessened, and the organs worn out, the consumption will 
begin to exceed the renovation; and decay, degradation, and in 
the end total dissolution will unavoidably follow. This is uni- 
versally the case. Every created being passes through three 
periods : that of its growth, that of its being stationary, and that 
of its decline." In another place he says, " the duration of life 
in a being will be proportioned to the innate quantity of vital 



136 BEITAIN FAMED FOR LONGEVITY. 

power, the greater or less firmness of its organs, the speedier or 
slower consumption, and perfect or imperfect restoration. All 
ideas on the prolongation of life, as well as all the means which 
have been or may be proposed on that subject, can be brought 
under these four classes, and be examined under these principles." 
But still more important, he declares his earnest conviction, after 
many years' earnest study, that the grounds of a long or short 
life can be most effectually laid at an early period / and regrets, 
as all thinking men must regret, that through unpardonable 
negligence in the education of youth, information on this subject, 
so important to their physical happiness, is entirely forgotten. 

Britain has long been famed for the numbers of instances of 
longevity it has produced. Sweden, Norway, and Denmark have 
also furnished some notable instances ; but, further north, seventy 
is an age seldom exceeded. Ireland is even more remarkable 
than England or Wales ; and the annals of longevity abound in 
cases from the Sister Isle. In France, longevity is not so general, 
although we find a man died in that country in 1757, aged 121. 
The same with Italy, yet the northern provinces of Lombardy 
furnish instances of great age. Spain has recorded a few in- 
stances up to the age of 110. Greece is still celebrated in regard 
to longevity. The Island of Naxos is particularly prominent on 
this account. In Egypt and India there are some cases of long 
life, particularly among the Brahmins, Anchorites, and Hermits. 
Ethiopia formerly was much celebrated for its longevity — it had 
a tribe called the Macrobii, or " long-livers ;" but a contrary ac- 
count is given of it by Bruce. Some districts of Hungary are 
particularly distinguished by the great age of the people who 
reside there. Germany contains an abundance of old persons, 
but it affords few instances of very long life. In Holland, few 
people live to the age of 100; nor does Switzerland (generally 
spoken of as so healthy) afford many instances of longevity. 
Russia has furnished some extraordinary cases.* 

The proportion of inhabitants who attain the age of 80 has 
been found to be as follows in the places named : — 



Pays de Vaud (Switzerland) 



1 in 2H 



Brandenburgh 1 in 22£ 

Norwich 1 in 27 

Manchester 1 in 30 

London .... .... .... .... .... 1 in 40 

Edinburgh Iin42 

Out of 10,000 persons buried in each of the following districts, 
the following proportions only lived to the advanced ages named, 
viz. : — 

In London ... 36 had reached 90 ; and 2 to 100 years. 

England generally 89 " " 4 

Cornwall 137 " " 6 " 

Wales 211 "■ " 13 

So that Wales is evidently the locality of the Ancient Britons. 

* Vide Hufeland. 



AUTHORS ON LONGEVITY. 137 

At the Census of 1851, 111 men and 208 women returned ages 
ranging from 100 to 119 years. In reference to these cases the 
Census Report says — 

" Two-thirds of the centenarians are women. Several of them in England 
are natives of parishes in Ireland or Scotland, where no efficient system of 
registration exists ; few of them reside in the parishes where they were born, 
and have been known from youth ; many of the old people are paupers, and 
probably illiterate ; — so that it would no doubt be difficult to obtain the docu- 
mentary evidence which can alone be accepted as conclusive propf of such 
extraordinary ages." 

In Great Britain and Ireland, during the years 1850 to 1853, 
there were exactly 1,000 deaths amongst the "Friends;" and out 
of this number 517 reached 60 years of age or upwards, of whom 
353 reached 70 years or upwards, and of them 141 reached 80 
years or more. A recent writer, in the Statist, says — 

"In a curious publication by M. Lejoncourt, entitled Les Centenaires An- 
ciens et Modernes, we have an account of forty-nine persons in England dur- 
ing the last century, who reached from 130 to 180 years of age. Of these 
seven died at 134, four at 138, two at 155, one at 159, one at 160, one at 168, 
one at 169, and one at 175 years. Dr. Bernard Van Oven, in a work on health 
and longevity recently published, gives a further list of 7,000 persons who 
attained to the same great ages." 

In 1799 a book was published at Salisbury, by James Easton, 
on "Human Longevity," containing the names of 1,712 persons, 
who had reached the age of 100 years and upwards. Haller had 
previously published a Table, enumerating 1,111 of such cases; 
and in 1826 Mr. Charles Babbage made a collection from Easton's 
books, and from other sources, of 1751 similar cases. His (Mr. 
Babbage's) object was to construct a comparative Table, to show 
the expectation of life to persons who had attained that advanced 
age ; and he found that of the numbers recorded by each of the 
authors named, there died between the ages of 100 and 110 : — 

Haller 1000 Easton 1310 Babbage 1278 



Between 110 and 120 


60 


" 


211 


330 


120 " 130 


29 


« 


84 


99 


130 " 140 


15 


" 


26 


32 


140 " 150 


6 


" 


7 


12 


150 " 160 


1 


ce 


3 





160 " 170 





a 


2 





170 " above 





tt 


3 






1111 1712 1751 

By far the largest number of deaths, both male and female, 
occurred at the age of 102, but more particularly amongst the 
males ; whilst at the age of 101 the mortality was particularly 
low. The chances of surviving beyond 150 are exceedingly re- 
mote. 

But at the commencement of the present year a book was pub- 
lished at Nottingham, compiled by Mr. Thomas Bailey, a literary 



138 MARRIAGE ESSENTIAL TO LONGEVITY. 

man and journalist of some note in that town, containing about 
3,000 instances of deaths at 100 years and upwards, chiefly in 
England, Wales, Scotland, and Ireland. From this, and several 
other sources, we have compiled the Table given at the end of 
this section. Unfortunately for the book, its compiler was re- 
moved by death, having reached an honorable age, while it was 
passing through the press. Hence the various defects in arrange- 
ment, &c. ; but it will well repay careful perusal. 

One of several noticeable points in connection with the cases 
given is, that the great majority of the English instances of ex- 
traordinary longevity have occurred in the counties lying along 
the eastern coast of the kingdom, from the northern bank of the 
Thames. The exceptions are Shropshire (very marked), Cheshire, 
Staffordshire, and Surrey. Yorkshire, from its extensive area 
and large extent of coast range, has the largest number of cases, 
and we cannot fail to be struck with the number of instances of 
deaths, over 100, which have occurred in London and its imme- 
diate suburbs. 

Another very noticeable circumstance is that more women 
than men became old ; but that men only attain to the utmost 
extent of longevity. This fact has not escaped the pl^siologists. 
Hufeland thus endeavors to account for it : — The equilibrium and 
pliability of the female body seem for a certain time to give it 
more durability, and to render it less susceptible of injury from 
distinctive influences. But male strength is, without doubt, 
necessary to arrive at a very great age. More women, therefore, 
become old ; but fewer very old. In the first half of man's age, 
an active, even a fatiguing life, is conducive to longevity • but in 
the last half, a life that is peaceful and uniform. No instance can 
be found of an idler having attained to a remarkably great age. 
Rich and nourishing food, and an immoderate use of flesh do 
not prolong life. Instances of the greatest age are to be found 
among men who, from their youth, lived principally on vegeta- 
bles, and in some cases had never tasted flesh. A certain degree 
of cultivation is physically necessary for man, and promotes 
duration of life. The wild savage does not live so long as man 
in a state of civilization. To live in the country, and in small 
towns, is favorable to longevity ; to live in great towns is unfa- 
vorable, although not to the extent sometimes stated, or supposed. 
In almost every case of extreme old age, great temperance as well 
as frugality of living had been observed. 

Again, it may be noted that nearly all those people who have 
become very old were married, mostly, more than once, and 
frequently at a very late period of life. Hufeland went so far as 
to say there was not " one instance of a bachelor having attained 
to a great age !" And added, " This observation is as applicable 
to the female as to the male sex ; and hence it would appear that 
a certain abundance in the power of generation is favorable to 
longevity. It forms an addition to the vital power; and this 



AMERICAN LONGEVITY. 139 

power of procreation seems to be in the most intimate propor- 
tion to that of regenerating and restoring one's self; but a certain 
regularity and moderation are requisite ; and marriage is the only 
means by which these can be preserved. The greatest example 
of this (he adds) is a Frenchmen named Dr. Longueville, who 
lived to the age of 110. He had been married to 10 wives; his 
last wife he married when in his ninety-ninth year, and she bore 
him a son when he was in his hundred and first." The English 
records of longevity afford some very similar instances ; and 
certainly but few bachelors have found a place in the records. 

Dr. Fitch, in his well-known treatise on Consumption, gives 
us the following instances of remarkable longevity in the United 
States of America : — 

" In 1820 a man, named Henry Francisco, died at Whitehall, in the State 
of New York, aged 134 years ; he beat the drum at the coronation of Queen 
Anne, and was then 16 years of age ; he did not die of old age, but of the 
ague and fever. John Hightower, residing at Marengo County, Alabama, died 
January, 1845, aged 136 years. William Prigden, of Maryland, died October, 
1845, aged 123 years. The Rev. Mr. Harvey, a Baptist Minister, residing, at 
the time the Doctor wrote, at Frankfort, in the State of New York, was in 
the active and useful discharge of his clerical duties at the age of 111. A Mr. 
Blakewell was residing, a short time previovsly, at Greenville, North Caro- 
lina, aged 136 years; and a colored man, Sphynx, was living, about the same 
time, ' in fine vigorous health,' in Cumberland County, Virginia, at the age 
of 117 years. Daniel Atkin died at Wrexford, Upper Canada, 1846, aged 120 ; 
and M. John Van Hoozer, of Jefferson County, died about August, 1850, aged 
122 years. David Kenison, a soldier of the Revolution, died near Albany, 
New York, on the 24th February, 1852, aged 117 ; and William Prigdeon, of 
Bladen County, North Carolina, died a year or two previously, aged 122 years. 
The Negro and Slave races, in various parts of the world, have presented 
some remarkable cases of longevity, and America has some similar instances. 
In October, 1854, Judy, a slave on the Plantation of H. B. Richardson, in 
Bladen County, died, aged 110 years. She was one of eight slaves who, nearly 
60 years ago, were the first settlers on the Plantation where she died. Of 
the seven others, one died over 90 years of age ; another, 93 ; and a third, 81 ; 
two are living — one 75, and the other one 60 years of age." 

Notwithstanding what has been already stated, it would seem 
that of the two, extreme cold is more favorable to long life than 
extreme heat. Sir Henry Halford was informed by the Russian 
Ambassador, Baron Brunow, that there was a level country of 
about 100 leagues square, sloping to the South on the borders of 
Siberia, where a year rarely passed in the course of which some 
person did not die of the age of 130. The question asked, of 
course, was " Can you depend upon your registers there ?" To 
which the reply was, " Any body who knows the practices of the 
Greek Church will tell you that the bishops are more careful of 
their registration there, if possible, than your parochial clergy 
are in Great Britain." In the year 1835 there died, in the 
Russian Empire, 416 persons of 100 years of age and upwards ; 
the oldest was 135 years, and there were 111 above 110 years old. 
And from the official account of deaths in the same Empire, in 
1839, it appeared that there were 858 whose ages ranged from 



140 Russian longevity; emperors and popes. 

100 to 105 years; 126 from 110 to 115; 130 from 115 to 120; 
three from 120 to 130 ; one at 145 years ; three from 150 to 156 ; 
one at 160 ; and one at 166. At Dantzic, a man is said to have 
died aged 184, and another was living at Wallachia, in 1840, 
aged 186. 

On entering upon a similar inquiry with the present, Hufeland 
began with Emperors, Kings, and the great ones of the earth, 
asking himself this question, "Has nature, which has conferred 
upon them, in the highest degree, all the advantages and enjoy- 
ments of this world, bestowed upon them also her best gift— a 
longer duration of life ?" He answers, " Unfortunately, not ; neither 
ancient nor modern history informs us that this prerogative be- 
longs exclusively to them. In ancient history we find only a few 
Kings who attained to their eightieth year ; and this is equally 
the case in the modern. In the whole catalogue of Roman and 
German Emperors, reckoning from Augustus to the present time, 
which includes altogether above 200, we find (the two first, 
Augustus and Tiberius, excepted) only four who arrived at the 
age of 80, viz., Gordian, Valerian, Anastasius, and Justinian." 
He goes on to speak of Augustus, who was a temperate man — 
used none but the simplest food, ate only when he had an appe- 
tite, never drank above a pint of wine, and considered mirth and 
good company as the best seasoning of his meals ; and he lived 
to 76. We have already presented the list of English sovereigns, 
and the causes of their deaths, in a previous section of this 
division. 

Ecclesiastical princes, he observes, have not, in this respect, 
been more fortunate. " Of 300 Popes, who may be reckoned up, 
no more than five attained to, or exceeded, the age of eighty, 
though they possessed the advantage of obtaining the pontifical 
chair at a late period, and had, therefore a greater probability of 
enjoying longevity." By way of contrast, he remarks that an 
extraordinary number of instances may be found among the her- 
mits and monks, who, with the strictest regimen, self-denial and 
abstraction, while they divested themselves of all human passions, 
and avoided such intercourse as might tend to excite them, led a 
life of contemplation, but united with bodily exercise, and the 
enjoyment of free air. Thus, the Apostle John attained to the 
age of 93 ; Paul, the hermit, by means of an almost incredibly 
severe regimen in a grotto, to that of 113 ; and St. Anthony to 
that of 105. Athanasius and Jerome also exceeded the age 
of 80. 

Deep-thinking philosophers, he goes on to say, " have at all 
times been distinguished by their great age, especially when their 
philosophy was occupied in the study of nature, and afforded them 
the divine pleasure of discovering new and important truths : the 
purest enjoyment, a beneficial exaltation of ourselves, and a kind 
of restoration which may be ranked among the principal means 
of prolonging the life of a perfect being." Dr. Erasmus Wilson, 



PHILOSOPHERS, POETS, AND PAINTERS. 



141 



the editor of the Edition of Huf eland, from which we quote, 
gives the following list in illustration of the text : — 



Tasso 51 

Virgil ..52 

Shakespeare 52 

Moliere . . . . . . . . 53 

Dante 56 

Pope 56 

Ovid 57 

Horace 57 

Racine . . . . . . . . 59 

Demosthenes 59 

Lavater . . 60 

Galvani 61 

Boccaccio 62 

Fenelon 63 

Aristotle 63 

Cuvier 64 

Milton 66 

Rousseau . . . . . . . . 66 

Erasmus 69 

Cervantes . . . . . . . . 69 

Beaumarchais 69 

Dryden 70 

Petrarch 70 

Le Sage 70 

Linnaeus 71 

Locke 73 

La Fontaine . . . . . . 74 

Handel 75 

Reaumur . . 75 

Euler 77 



Galileo 78 

Swift 78 

Roger Bacon 78 

Corneille 78 

Marmontel 79 

Thucydides 80 

Juvenal . . . . . . . . 80 

Young 80 

Kant 80 

Plato 81 

Buffon 81 

Goethe 82 

Claude 82 

West 82 

Franklin 84 

Metastasio . . . . . . . . 84 

Herschel 84 

Anacreon 85 

Newton 85 

Voltaire 85 

Halley 86 

Sophocles . . 90 

Leuwenhoeck . . . . . . 91 

Hans Sloane 93 

Whiston 95 

Michael Angelo . . . . . . 96 

Titian 96 

Herodias 100 

Fontenelle 100 

Gorgias 107 



The list, it will be seen, includes the names of a good many of 
our greatest poets and painters. They are proverbially long- 
lived ; and other instances may be adduced, of more recent date. 
Amongst the poets, Cowper reached 69 ; Scott 61 ; Wordsworth 
80 ; Rogers 82 ; James Montgomery over 80, and Goethe 82 ; 
Byron, Burns, and Collins, indeed, died young, being respectively 
37, 37, and 38. Poor Keats was only 24. But with these draw- 
backs an average of something like 60 is attained. Music is a 
sister art to Poetry, and musicians are remarkable for length of 
days. Mozart, indeed, died at 36, but Haydn reached 78. 

The painters are mostly included in the list, but we may add 
Sir Thomas Lawrence, who died at 61, Sir J. Reynolds at 69, and 
Rembrandt at 82 ; but Raphael, again, died at 37. Sculpture is 
a sister art to painting, as music to poetry, and here we have Ca- 
nova at 65, and Flaxman at 71. We take these cases as they 
occur to us. The reader can supply others. 

In Gould's Dictionary of Artists, published in 1839, the names, 
with the ages, of 1,122 persons are given ; which furnish the fol- 
lowing facts as to longevity of this class : — Died under 60 years 



142 PHYSICIANS AND LONG LIFE. 

old, 474 (about two-fifths) ; 60 years and under 70, 250 (over 
one-fifth) ; 70 years and under 80, 243 (again over one-fifth) ; 80 
years and under 90, 135 (above 1 in 9) ; 90 years and under 100, 
19 ; above 100, 1. The average age at death of the whole num- 
ber being 55 years, from which (adds Mr. Bailey), "It would ap- 
pear that the pursuit of the fine arts has a tranquillizing effect 
upon the spirits, and a tendency to moral refinement in the habits 
and manners of its professors, extremely favorable to the prolon- 
gation of life." 

Thus my Lord Bacon (Hist, of Life and Death) says, " Admira- 
tion and light contemplation are very powerful to the prolong- 
ing of life ; for they hold the spirits in such things as delight them, 
and suffer them not to tumultuate or carry them unquietly or way 
wardly; and therefore all the contemplators of natural things, 
which had so many and so eminent objects to admire (as Demo- 
critus, Plato, Parmenides, Apollonius) were long lived ; also rhe- 
toricians, which tasted but lightly of things, and studied rather ex- 
ornation of speech than for profundity of matter, were long livers 
(as Gorgias, Protagoras, Isocrates, Seneca), and certainly, as old 
men are, for the most part, talkative, so talkative men do often 
grow old ; for it shows a light contemplation, and such as does not 
strain the spirits or vex them : but subtle, and acute, and eager 
inquisition shortens life, for it trieth the spirit and wasteth it." 

It is a little strange, though by no means unaccountable, that 
physicians who practice, are shorter lived than almost any other 
of the professional classes. The following solution has been 
offered by one of themselves : — "They have the best opportunity 
of observing these prudential rules and precautions for preserv- 
ing health, which they lay down for others ; and there are few 
employments in which the powers both of the body and mind are 
exposed to so much consumption as in this. Head and feet must be 
always exercised in common. But the greatest mortality pre- 
vails during the first ten years of their practice." After that time 
they become inured to the fatigue, and almost impervious to 
noxious effluvia, infectious disorders, or even the heart-melting 
scenes of woe into which their professional duties call them. Still 
there are some who have attained to a great age : amongst them 
the following may be mentioned : — 

Harvey . . . . . . . . 81 

Mead 81 

DuLamel 82 

Astruc . . . . . . . . 83 

Hoffman 83 

Pinel 84 

Swedenborg . . . . . . 85 

Morgagni . . . . . . . . 89 

Heberden 92 

Reysch . . . . . . . . 93 

Hippocrates 109 



Boerhaave 


. . 70 


Haller 


. . 70 


Tissot 


. . 70 


Gall 


. . 71 


Darwin 


. . 72 


Van Swieten 


. . 72 


Fallopius 


. . 72 


Jenner 


. . 75 


Heister 


. . 75 


Cullen 


. . 78 


Galen 


. . 79 


Spallanzani . . 


. . 79 



PROFESSIONAL LONGEVITY. 



143 



M. Lombard has carried this class of observations still further 
into detail, and has given as the result the following as the dura- 
tion of each of the classes he names : — 



Magistrates 69 years. 



Clergymen 

Merchants 

Gardeners 

Masons and Bricklayers 

Surgeons 



63 
62 
60 
55 
54 



Butchers 

Sawyers 

Joiners and Carpenters 

Painters, ordinary . . 

Millers and Bakers 

Stone Cutters* . 



53 years. 
51 " 
49 " 

44 « 

42 " 
34 " 



Annuitants, as a class, are not included in this Table. Their 
extraordinary tendency to long life has become proverbial. The 
cause is almost as patent as the fact, viz., the absence of any care 
or anxiety about worldly affairs. Strange to say, however, the 
observations taken upon Government annuitants showed the " ex- 
pectation " on male lives below 30 to be less than that of the 
general population. The irregularities of youth was the cause 
assigned. We may here remark that the influence of the mind 
upon the duration of life is even more marked than the occupa- 
tion of the body. Where the mind is devoted to one object, there 
is also a better chance of long life than if the mental energies be 
exhausted by grasping two or three. 

Dr. Guy, whose name has already been introduced in these 
pages, has paid long and marked attention to the duration of life 
amongst the professional classes in this kingdom. Some years 
since, he published some statistics, showing the average age at 
which each of the following classes died, after having reached the 
age of 51 : — 

Tears. Years. 

Clergy 74 I Medical men 73 

Lawyers 72f | Learned professions collectively 76£ 

The clergy, therefore, of the three, are the most healthy ; the 
lawyers the least so. 

He has subsequently taken observations on the most eminent 
of these professions' only, with the following results : — 

Years. 

Clergy (archbishops and bishops) 70£ 

Lawyers (judges, &c.) 67 

Medical men (baronets, &c.) 74£ 

The medical profession here has the advantage. In a paper, 
recently published in the Statistical Journal, he reviews these 
observations, and furnishes additional ones; and summing up 
with the following conclusions. 1. That the duration of life 
among lawyers is somewhat shorter than that of the members of 
the two other learned professions. 2. That the duration of the 



* For additional information on stonemasons' lives, see Society of Arts Journal, vol. viii., 
p. 773.— Note 1866. 



144 private gentlemen; annuitants; "friends." 

life of lawyers has suffered a slight progressive decrease during 
the last three centuries. And, generally, he lays down (1) that 
the members of the three learned professions occupy, in respect 
of the duration of their lives, a favorable position among the edu- 
cated classes. (2.) That the difference in the duration of life of 
the three learned professions is not considerable. (3.) That the 
three learned professions occupy the following relative position in 
respect to the duration of their lives, the longest lived being 
placed first : medical men, clergymen, lawyers* 

Sir Humphry Davy differed in his views from several of the 
writers already quoted, and his remarks have a great show of 
truth about them. The English, as a nation, are pre-eminently 
active, and the natives of no other country follow their objects 
with so much force, fire, and constancy. And as human powers 
are limited, there are few examples of very distinguished men liv- 
ing in this country to old age ; they usually fail, droop and die 
before they have attained the period naturally marked for the 
end of human existence. The lives of our statesmen, warriors, 
poets, and even philosophers, offer abundant proofs of the truth 
of this opinion ; whatever burns, consumes, — ashes remain. Be- 
fore the period of youth is passed, grey hairs usually cover those 
brows which are adorned with the civic oak or the laurel ; and in 
the luxurious and exciting life of the man of pleasure, their tints 
are not even preserved by the myrtle wreath or the garland of 
roses from the premature winter of time."f 

At the Census of 1851 there were returned in London 3,072 
persons classed as "independent gentlemen," and 4,719 defined as 
" annuitants." The reader will not suppose that the number of 
independent gentlemen is actually limited to the number just 
given (or, perhaps, the annuitants either) — the figures refer to 
the number who returned themselves as such. Now, in the year 
last past, 1856, there died of these numbers respectively — "inde- 
pendent gentlemen," 546; "annuitants," only 34! The Times, 
quoting these figures in a leader, remarked, in reference to them, 
" It has always been usual to regard annuitants as endowed with 
peculiar tenacity of life, and in the occasional bitterness of irony, 
they have been described as the real undying ones of the human 
race. We confess, however, that we never accepted the impres- 
sion so completely in the light of a fact as it is placed by the 
Tables before us !" 

We have also just spoken of the length of days enjoyed by the 
members of the " Society of Friends." A valued acquaintance 
of that class has handed us a Table confirmatory of that fact, 
based upon the deaths of 1853, which we here give. We believe 
a Table of the kind is prepared every year : — 



* Vol. 20, p. 17. t The Last Days of a Philosopher. 



EXTRAORDINARY CASES OF LONGEVITY. 



145 



TABLE 

Showing the Deaths, at different Ages, in the Society of Friends in Great Bri- 
tain and Ireland, during the years 1850-51, 1851-52, and 1852-53. 





Year 1850-51. 


Year 1851-52. 


Year 1852-53. 


Age. 








































Male. 


Female. 


Total. 


Male. 


Female. 


Total. 


Male. 


Female. 


Total. 


Under 1 year* 


17 


11 


28 


10 


5 


15 


13 


8 


21 


Under 5 years 


25 


16 


41 


18 


12 


30 


18 


13 


31 


From 5 to 10 


3 


7 


10 


5 


7 


12 


4 


2 


6 


« 10 " 15 


1 


1 


2 


4 


7 


11 


5 


6 


11 


" 15 " 20 


9 


4 


13 


7 


4 


11 


5 


3 


8 


" 20 " 30 


12 


10 


22 


10 


23 


33 


7 


10 


17 


" 30 " 40 


10 


12 


22 


4 


19 


23 


8 


8 


16 


" 40 « 50 


9 


10 


19 


9 


13 


22 


7 


14 


21 


" 50 " 60 


19 


21 


40 


10 


22 


32 


16 


14 


30 


" 60 " 70 


23 


24 


47 


28 


29 


57 


26 


34 


60 


" 70 " 80 


31 


44 


75 


25 


46 


71 


20 


46 


66 


" 80 " 90 


16 


15 


31 


16 


41 


57 


13 


24 


37 


" 90 "100 


2 


3 


5 


1 


2 


3 


2 


6 


8 




160 


167 


327 


137 


225 


362 


131 


180 


311 



Average age in 1850-51 — 50 years, 3 months, 7 days, and 9-10ths. 
1851-52—52 " 11 " 1£ " 
1852-53—53 " 1 '« 3 " 

But the most extraordinary instances of longevity must be 
searched for amongst classes, for the most part, other than those 
we have named — such as those who are frequently subjected to 
great bodily labor, and mostly in the open air — those who lead a 
simple life, most in accordance with nature, as farmers, garden- 
ers, agricultural laborers, huntsmen, and occasionally soldiers and 
sailors. "In these situations," says Hufeland, "man still attains 
to 140 or even 150 years." He refers, in detail, to Henry Jen- 
kins, of Yorkshire, who died in 1670, aged 169, his occupation 
having been chiefly that of fishing; to Thomas Parr, of Shrop- 
shire — rendered famous by association (in name only) with 
"Parr's Life Pills" — he was 152 years 9 months old when he died, 
and had lived under nine Kings of England ! His occupation 
was that of a farm servant, and he had to maintain himself by 
daily labor. A grandson of this same "Parr" died at Cork some 
years since, aged 103. Also to Effingham, who died in Cornwall 
in 1757, aged 144. He was a laborer, but had in his younger days 
been a soldier. 

But we arrive at a point at which it appears desirable to take a 
more physiological view of the question. M. Flourens, in his 
famous book — De la Longevite Humaine etde la Quantite de Vie 
stir le Globe, Paris, 1855 — a book which has aroused the attention 
of nearly all the scientific men in Europe, gives the following as 

* The numbers in this series are included in the next, " under 5 years." 



146 THE PERIOD OF LIFE AN HUNDRED TEARS. 

the natural divisions, and natural durations, of the life of man : — 
"The first ten years of life are infancy, properly so called; the 
second ten is the period of boyhood ; from twenty to thirty is 
the first youth ; from thirty to forty the second. The first man- 
hood is from forty to forty-five ; the second from fifty-five to sev- 
enty. This period of manhood is the age of strength — the manly 
period of human life. From seventy to eighty-five is the first 
period of old age ; and at eighty-five the second old age begins." 
A hundred years being, in his opinion, the natural period of ex- 
istence. An able English reviewer of this book says, (vide 
Blackwood's Magazine, May, 1855) : — 

" The limits thus assigned by Flourens to the several periods of life are not 
wholly arbitrary, like those we generally talk of; on the contrary, a little 
more or less sound physiological reason is assigned for each. Infancy proper 
ceases at ten, because then the second toothing is completed ; boyhood at 
twenty, because then the bones cease to increase in length ; and youth ex- 
tends to forty, because about that time the body ceases to increase in size. 
Enlargement of bulk after that period consists chiefly in the accumulation of 
fat. The real development of the parts of the body has already ceased. In- 
stead of increasing the strength and activity, this latter growth weakens the 
body, and retards its motions. Then when growth has ceased, the body rests, 
rallies, and becomes invigorated. Like a fortress with all its works com- 
plete, its garrison in full numbers, and threatened with an early siege, it re- 
pairs, arranges, disposes everything within itself. The new stores it daily re- 
ceives are employed in fully equipping, in strengthening, in rebuilding, and in 
maintaining every part in the greatest perfection and efficiency. This period 
of internal invigoration lasts fifteen years (that of the first manhood) and it 
maintains itself for ten or fifteen years more, when old age begins." 

The illustration is good. 

Bvffon, whose whole life was devoted to this and kindred sub- 
jects, says — " The man who does not die of accidental diseases 
lives everywhere to ninety or a hundred years." He bases his 
conclusions on physiological data. " The total duration of life 
may be estimated to a certain degree by that of the duration of 

an animal's growth Man increases in height up to 

his sixteenth or eighteenth year, and yet the full development in 
size of all the parts of his body is not completed till the thirtieth 
year. The dog attains his full length in one year, and only in the 
second year completes its growth in bulk or size. Man who 
takes thirty years to grow, lives ninety or a hundred years. The 
dog which grows only two or three years, lives only ten or 
twelve ; and it is the same with most other animals." He after- 
wards follows out the idea more fully. " The duration of life in 
the horse, as in all other species of animals, is proportionate to the 
length of time during which it grows. Man who takes fourteen 
years to grow, may live six or seven times as long ; that is to 
ninety or a hundred years. The horse which completes its 
growth in four years may live six or seven times as long, that 
is to twenty or thirty years. r , . The stag is five or six 



LONGEVITY PHYSIOLOGICALLY CONSIDERED. 147 

years growing: it lives also seven times five or six, that is 
thirty-five or" forty years.'' 

Flourens, taking up this ingenious idea of Buffon's, and having 
the advantage of more correct physiological knowledge than 
existed in the days of the latter (who, however, did much to 
prepare the way for this increased knowledge), gives us the 
following corrected Table : — 

Years. Years. Years. Years. 

Man grows for 20 and lives 90 or 100 The Dog grows for 2 and lives 10 or 12 

The Camel . . 8 . . . . 40 The Cat . . .. H .... 9 or 10 

The Horse . . 5 . . . . 25 The Hare . . . . 1 . . . . 8 

The Ox . . 4 . . . . 15 to 20 The Guinea-Pig 7 months 6 or 7 
The Lion . . 4 . . . . 20 

His theory of the completion of animal growth being grounded 
on the union of the bones to their epiphyses. " So long as this 
union does not take place the animal grows. As soon as the 
bones are united to their epiphyses the animal ceases to grow." 
And his multiple for the duration of life is five times the period 
of growth with all the larger animals, instead of six or seven 
times, as with Buffon. But it is worth while to quote his exact 
words : — 

" It is about fifteen years since I entered upon a course of researches into the 
physiological law of the duration of life, both in man and in some of the 
domestic animals. The most striking result of this labor, as will soon be 
shown, is that the normal duration of the life of man is one century. A hun- 
dred years of life is what Providence intended for man ; it is true few men 
reach this great term, but yet how few do what is necessary to attain it. 
With our customs, our passions, our miseries, man does not die — he kills 
himself." 

The regular and determinate duration of life, according to M. 
Flourens, depends on the periods of gestation and growth, each 
animal living about five times as long as the term of its growth. 

" Man being twenty years growing, lives five times twenty, that is to say, 
one hundred years. The camel is eight years growing and lives five times 
eight, or forty years. The horse is five years growing and he lives five times 
five, that is to say, twenty-five years ; and so with the rest. We have then 
finally a precise characteristic which gives us accurately the duration of 
growth ; the duration of growth gives us the duration of life. All the phe- 
nomena of life are united by the following chain of relations — the duration of 
life is given by the duration of growth ; the duration of growth by the dura- 
tion of gestation ; the duration of gestation by the height, &c. &c. The 
larger the animal, the longer is the time of gestation. The gestation of the 
rabbit is thirty days ; that of man is nine months ; that of the elephant is 
nearly two years, &c." 

Holler, who also devoted much time to the investigation of 
this subject, adopted a different basis for his conclusions, although 
he was fully capable, as a professed physiologist, of applying it to 
the principles of that science. "He collected together all the 

authenticated instances of long life His conclusion — 

not a very precise one — is that the utmost limit of human life is 
not within Uoo hundred years /" 



148 NATURAL TERM OF HUMAN LIFE. 

Pythagoras, the Phoenician, used to divide the life of man into 
four equal parts. From the first to the twentieth year he called 
him a child, a man begun ; from the twentieth to the fortieth, a 
young man ; from the fortieth to the sixtieth, a man ; from the 
sixtieth to the eightieth, an old or declining man ; and after this 
period he reckoned him no more among the living, let him live to 
whatever age he might* 

Hufeland lays it down as a rule, that the animal lives eight 
times as long as it grows. Now man, in a natural state, where 
the period of maturity is not hastened by art, requires full 25 
years to attain his complete growth and conformation ; " and this 
proportion also will give him an absolute age of 200 years." He 
states that nearly all those deaths which take place before the hun- 
dredth year are brought on artificially — " that is to say, by disease 
or accident ; and it is certain that the far greater part of men die 
an unnatural death, and that not above one in a thousand attains 
to the age of 100 years" — a fact we are fully cognizant of. With 
regard to the relative duration of human life, that, he says, is 
extremely variable, and as different as each individual. " It is 
regulated according to the goodness or badness of the mass of which 
the person is formed ; his manner of living ; speedier or slower 
consumption ; and a thousand internal and external circumstances 
which may have an influence on the continuance of his existence. 
We must not," he continues, "imagine that every man, at present, 
brings with him into the world a vital stock capable of lasting 
150 or 200 years." Still he has elsewhere asserted, that the orga- 
nization and vital power of man are able to support " a duration 
and activity of 200 years." 

Coming to more recent authorities, Dr. Farr, in the 16th 
Annual Report of the Registrar-General, says — " the natural term 
of human life appears to be a hundred years / and out of the 
annual generations successively born in England and Wales, a few 
solitary individuals attain that limiting age, the rest dropping off 
year by year as age advances, so that the mean lifetime is at 
present only 41 years." If we remember rightly, Dr. Cumming, 
in his sermons, has expressed his belief that 130 years is the last 
limitation assigned to human life by the Divine decree ; and a 
recent writer in the Statist, contemplating the usual decline of 
man at sixty, thus exclaims : " Shall we startle our readers, by 
affirming that it is perfectly possible to bestow once more upon 
mankind a patriarchal length of days ? We speak only of the 
Abrahamic epoch, when every man sat under his own vine and 
fig-tree. Yet so it is ; but to accomplish it, we must do as they 
did ; avoid great cities ; shun strong drinks ; eat sparingly ; rise 
early, and live actively. Within the last two centuries many 
well-authenticated cases in England and Wales are recorded of 
persons who lived to ages varying from 150 to 200 years ! a 

* Hufeland. 



THE PERIOD OF EXISTENCE CURTAILED. 149 

length of days commonly believed to belong exclusively to the 
patriarchal era." 

The Census of 1851 furnished some corroborative testimony. 
There were in Great Britain at that period more than half a mil- 
lion (596,030) who had passed the barrier of " three-score years 
and ten ;" more than 129,000 had passed the psalmist's limit of 
"four-score years;" and 100,000 the years which the last of 
Plato's climacteric square numbers expressed (9 times 9 = 81); 
nearly ten thousand (9,847) had lived 90 years or more ; a band 
of 2,038 aged pilgrims had been wandering 95 years and more 
on the unended journey ; and 319 — 111 men and 208 women — said 
they had witnessed more than a hundred evolutions of the 
seasons, some of them reaching 119. These, and other similar 
considerations, no doubt led Dr. Farr to the conclusion that a 
century may be considered " the circuit of time in which human 
life goes through all the phases of its evolutions." 

But we do not intend dwelling on this part of the subject. 
The point we wish more particularly to enforce is, that whatever 
the allotted duration of human life may be, speaking physiologi- 
cally, we do not, in this country (any more than in most other 
parts of the world), on an average, enjoy the full period of exist- 
ence assigned to us. And of this fact we can furnish abundant 
and unmistakable proof. A recent writer in the Times* has well 
expressed himself hereon. He says : — 

" To those perhaps who reflect that, after all, the years of man are still, as 
in the days of the Psalmist, but three score and ten it may seem that the pre- 
tensions of sanitary science to prolong life rest on a very slender foundation. 
But the truth is, that our efforts are required not to surpass this standard but 
to attain it. It is only by vigilance and energy in the work of self -preservation 
that the appointed average can be reached; and it is when we read in such cal- 
culations as we have now been considering (the Registrar-General's Report) 
the number of years and lives which are lopped off by preventible disorder, 
that we feel in its fullest force, the duty imposed upon us of employing, to the 
utmost, the remedial means within our reach." 

Now, if it be necessary to give any illustration of how few per- 
sons really die from what may be termed natural causes — namely, 
old age, or the natural wear and tear of the system — beyond 
those which are every day occurring within the observation of 
each of our readers, these reports of the Registrar-General afford 
us abundant materials, and in an understandable form. Accord- 
ing to the 16th annual report recently published, the total deaths 
in this kingdom, in 1853, were 421,097, and of this number, in all 
but 6,899 cases, the causes are specified. Consumption (which, as 
we have elsewhere stated, is more fatal than any other single dis- 
ease in this country) claimed its 54,918 victims. "The deaths 
from this cause were 46,614 in 1850, and have since that year in- 
creased progressively without any very evident reason. Pneu- 
monia claimed its 24,098; bronchitis, 22,391; typhus, 18,013; 

* 28th January, 1857. 



150 



CAUSES OP DEATH ; DIMINUTION OP MORTALITY. 



scarlatina, 15,699; and diarrhoea, 14,192. Dropsy claimed 
10,302 ; apoplexy, 8,496 ; paralysis, 8,378. The hooping-cough 
took off 11,200, which was considerably above the average; 
24,796 died of convulsions — these would be chiefly children; and 
no less than 18,968 died from premature birth and debility. 
Disease of the heart was fatal in 12,864 cases. Asthma took off 
5,143 ; and cancer 5,663. Small-pox took off 3,151 ; the measles 
4,895 ; and the croup 3,660. Teething proved fatal to 4,678 chil- 
dren; and 2,268 mothers died of childbirth. One mother died to 
every 200 children bom alive. Disease of the brain terminated 
fatally in 3,444 cases, and disease of the liver in 4,139 other in- 
stances. Malformations and premature births were more fatal to 
males than females ; and out of the 29,141 who alone are reported 
as having died of old age — being about 7 per cent, of the entire 
number of deaths in the year, and only about half the number 
which died from consumption — there were 16,543 women against 
12,598 men. During the year, 252 persons died of carbuncle and 
boil; and 116 from lock-jja\o {tetanus). Of every 100 deaths, 38 
proceed from what are called local diseases ; 1 2 from diseases of 
the nervous system; and 13 from diseases of the respiratory or- 
gans ; or if consumption be added, 26. Such statistics are un- 
mistakeable. 

But we have, as an additional argument, and as a circumstance 
of great encouragement, the fact that the mortality of this king • 
dom is gradually becoming less, or in other words, that the ave- 
rage duration of life is becoming extended. Even within the past 
century the change for the better has been so rapid and astound- 
ing as at first sight to appear almost incredible. But we derive 
our data from one of the greatest authorities this country, or the 
world, ever produced. The late Mr. Griffith Davies says : — 

" By laborious investigations I have ascertained, upon indubitable evidence, 
that a gradual diminution has taken place in the mortality among the inhab- 
itants of this country throughout the last 100 years ; and that taking all ages 
together, out of the same population while from 



1720 to 1730 there died annually only 106 

1730 " 1740 " " .... 104 

1740 " 1750 " " .... 92 

1750 " 1760 " " .... 85 

1760 " 1770 " " .... 84 

1770 " 1780 " " .... 86 



1780 to 1790 there died annually only 79 

1790 " 1800 " " .... 75 

1800 " 1805 " " .... 70 

1805 " 1810 " " .... 66 

1810 " 1815 " " .... 61 

1815 " 1820 " " .... 62 



So that the mortality decreased two-fifths between 1720 and 
1820, and has still further decreased since that period. How much 
more will it do so now that almost every town in the kingdom 
has its Board for the due enforcement of sanitary regulations ; 
when proper cemeteries are being provided for the burial of the 
dead ; and when dwellings for all classes are being erected with 
due regard to healthiness of situation, and a proper supply of 
pure air and water, so essential to the preservation of human life ! 
We have good right to assume that the full measure of human 
existence is only attained under a combination of all the circum- 



AVERAGE MORTALITY OF ENGLAND AND WALES. 151 

stances known to be favorable to perfect health. Therefore, we 
may fairly take the mortality of the healthiest districts in the 
kingdom for the basis of what the general mortality would be 
under equally favorable circumstances — making a proportionate 
allowance for the influence of occupation upon health, and, there- 
fore, upon the mortality. This part of the subject will be more 
fully treated in our chapter on " Vital Statistics ;" in the mean- 
time, we here present a few facts bearing upon it. 

The average mortality of England and Wales is, as we have 
seen, 22 in 1000 annually, but there are some favored districts 
where it falls much below this. For instance, during the ten 
years 1841-50, it was found that the average annual mortality in 
Hothbury and Glendale, in Northumberland, and Eastbourne, in 
Sussex, was only 15 per 1000, or 7 below the average of the king- 
dom. In 14 other districts, viz. Hols worthy and Okehampton 
(Devon), Battle, Cuckfield, and Steyning (Sussex), Reigate and 
Hambledon (Surrey), Haltwhistle (Northumberland), Easthamp- 
stad (Berks.), Guisborough (Yorks.), Bootle (Cumberland), Christ- 
church (Hants.), Garstang (Lancashire), and Builth (Brecknock- 
shire), the mortality during the same period was only 16 per 
1000. While in 47 other districts, including Hendon which com- 
prises Harrow, Belford (Northumberland), Southwell (Notts.), 
and Dorking (Surrey), it was at the rate of 17 per 1000. The 
Registrar-General remarks hereon — " Upon going over these dis- 
tricts it will be found that the health and the circumstances of the 
population by no means approach any ideal standard of perfection. 
Nature, however, does much for the inhabitants. The fresh air 
dilutes the emanations from their nuisances ; and infectious dis- 
eases are not easily transmitted from person to person in 
detached houses. Still the health of the people in those 
districts admits of improvement ; and it may be assumed with 
certainty that the mortality of the English people in very variable 
but generally under favorable conditions, does not exceed 17 in 
1000." 

If we were called upon for a solution of the key to health and 
long life, so far as these are individually in our own keeping, our 
answer would be comprised in three words — sobriety of living. 
Let this at once be defined. " It consists," says Cornaro, " in 
moderate eating, in moderate drinking, and in moderate enjoy- 
ment of all the pleasures of life. In keeping the mind moderately, 
but constantly employed, in cultivating the affections moderate- 
ly, in avoiding extremes of heat and cold, and in shunning exces- 
sive excitement either of body or mind." " By a sober life," says 
Lessius, in his Art of enjoying perfect Health, " I understand a 
moderate use of meat and drink, such as accords with the tem- 
perament and actual dispositions of the body, and with the func- 
tions of the mind. A sober life is a life of order, of rule, and of 
temperance." He then gives seven rules to be observed, in order 
to follow out such a mode of living, (l) Not to eat so much as 



152 ART OF ENJOYING PERFECT HEALTH. 

will unfit the mind for its usual exertions ; (2) or so much as will 
make the body heavy or torpid. (3) Not to pass hastily from 
one extreme of living to another, but to change slowly and cau- 
tiously. (4) To eat plain and wholesome food. (5) To avoid too 
great variety, and the use of curiously-made dishes. (6) To pro- 
portion the quantity of food to the temperament, the age, and the 
strength of the eater, and to the kind of food he uses. (7) Not to 
allow the appetite for food to regulate the quantity we take, as 
this sensual desire is really the cause of the whole difficulty. 

Cornaro never tired of sounding the praises of sobriety of 
living ; and Lessius, again and again, sang in the same strain. 
Our own immortal Shakespeare, too, with his characteristic clear- 
ness and brevity, enforces the same principle, when he makes 
Adam, the old servant of Oliver, thus exclaim : — 

" Though. I look old, yet I am strong and lusty 
For in my youth I never did apply 
Hot and rebellious liquors in my blood ; 
Nor did not with unbashful forehead woo 
The means of weakness and debility ; 
Therefore my age is as the lusty winter, 
Frosty, but kindly." 

But let it never be forgotten that temperance in eating is quite 
as important, if not even more so, than temperance in drinking. 
Gornaro's warning to his countrymen, three centuries ago, is not 
unworthy of consideration even in the present day. " Oh ! miser- 
able and unhappy Italy, dost thou not see that gluttony is killing 
every year more people than would perish in a season of most 
severe pestilence, or by the fire and sword of many battles ?." For 
60 years, Cornaro himself took only 12 ounces of food, everything 
included, and 13 ounces of drink daily, and he attained to the 
age of 100 years. 

The quality of food is as necessary to be studied as the quan- 
tity. Hufeland points out that it is not those who lived on flesh, 
but on vegetables, pulse, fruit, and milk, who attained to the great- 
est age. He says, "Lord Bacon mentions a man of 120, who, 
during his whole life, never used any other food than milk. The 
Brahmins, by their religion, are confined merely to vegetables, 
and for the most part live to the age of 100. John Wesley, in 
the middle of his life, gave over the use of flesh, lived upon vege- 
tables alone, and attained the age of 88 !" Another rule he lays 
down on this subject is, that those who wish to live long ought to 
eat slowly. Good teeth, a good appetite, good digestion, and a 
good temperament, are also considered among the essential pro- 
perties requisite for long life. Good temper, too, appears almost 
as requisite as a good temperament. 

Sleep, a condition which takes place in every animal of a per- 
fect kind, if properly regulated, is also, according to Hufeland, a 
promoter of longevity. Nothing, he says, is able to waste and 
destroy us so speedily as long-continued want of sleep ; although, 



AVERAGE WEIGHT OF HEALTHY PERSONS. 153 

as he remarks, " old people sleep less because their intensive life, 
or vital consumption, is weaker and requires less restoration. 
Excessive sleep is to be avoided, as tending to produce corpulency, 
and the deposition of fat in the human body. Dr. Chambers, who 
had given much consideration to the causes and consequences of 
obesity, says, "The amount of fat required for the full and per- 
fect resistance of the body, is different in different individuals, and 
will also vary according to their mode of life* Thus a man of 
letters will require less than a soldier; a soldier less than a prize- 
fighter." In opposition, however, to the opinion of an authority 
we shall presently have occasion to quote, he lays down that it is 
impossible to fix any absolute standard of weight for individuals, 
as an index of health, and that it is incorrect to look upon the 
average weight of healthy persons in proportion to their height. 
Still, although no absolute standard of weight can be adopted, the 
Doctor says : — 

" The development of fat, I consider, an element of great practical import- 
ance in calculations of the value of human life. It is of the more importance 
from the facility with which it may, in all but exceptional cases, be reckoned 
by the weight in proportion to the stature. In our species the bulk of the 
frame is pretty accurately shown by the height, and consequently the quan- 
tity of fat which ought to be attached to that frame may be calculated. Its 
deviations from the normal proportion may, therefore, easily be arrived at ; 
and can hardly be denied to lead to very valuable conclusions. What can add 
more to that examination, which has resulted in the discovery of no disease, 
than to find that the weight is such as the healthiest usually possess ? while 
if a person is much above or below the standard it is' not necessary to dis- 
cover any other bad symptom to pronounce the insurance of his life as above 
the ordinary risk. Were we confined to the observation of one single fact by 
which to appreciate the probability of future illness, I do not know any which 
would teach us more than this ; and when we have means of learning other 
circumstances, there is none which opens the ground better for investigation." 

The writer illustrates his meaning by the following example : — 

" If a proposal for assurance be sent from the country, backed merely with 
the opinion of a referee, whom we do not know, that ' no signs of disease are 
discernible,' and that the proposer has a robust appearance, our knowledge 
of the tendencies of his constitution is small indeed. But if to this it be added 
that he is five feet eight inches high, and weighs 11 stone, we feel a certain 
degree of safety in accepting him. But should his weight be seventeen stone, 
a probable deposit of fat in the omentum and the heart occurs to us — disturb- 
ance of the abdominal circulation, apoplexy, &c, are suggested, and the lia- 
bility to these balanced and inquired about ; a corresponding deviation from 
the natural weight in the other direction would, in a similar manner, lead to 
a more detailed examination of the chest, and a calculation of the probable 
existence of tubercle. When we remember (he adds) that four-fifths of the 
losses at Insurance Offices arise from apoplexy and consumption (?) the safety 
which they would gain by the simple observation above-mentioned is ob- 
viously very important to those engaged in such enterprises." 

The writer then quotes Dr. Hutchinson's Table, which gives 
the mean weight, at various heights, of 5,000 healthy men ; the 
extremes of stature being excluded. He gives, as an example, 
that part of the Table which relates to men of from five to six 



154 



RELATION OF HEIGHT TO WEIGHT. 



feet in height ; — and we do the same. It was based upon 2,650 
observations, and may be taken as the standard of mean healthy 
weight : — 

A person 5 feet 1 inch high should weigh 8 stones 8 lbs. 



5 


" 


2 inches 


5 


" 


3 " 


5 


" 


4 " 


5 


a 


5 " 


5 


iC 


6 " 


5 


t( 


7 " 


5 


" 


8 " 


5 


U 


9 " 


5 


" 


10 " 


5 


{( 


11 " 


6 


(t 


" 



9 


«< — 


9 


« 7 


9 


" 13 


10 


" 2 


10 


" 5 


10 


" 8 


11 


" 1 


11 


" 8 


12 


" 1 


12 


" 6 


12 


" 10 



" The individuals on whom these observations were made were men in the 
prime of vigorous life, capable of, and accustomed to use great muscular 
exertions, such as sailors, firemen, policemen, Grenadier Guards, watermen, 
cricketers, gentlemen, Oxford and Cambridge rowers, and the like ; a certain 
quantum of paupers and artizans may be fairly set off by an equivalent 
allowance of draymen, wrestlers, and pugilists, who are inserted." 

Having directed attention to requisites and essentials of health 
and long life, it would have been in keeping to note those things 
which are most to be guarded against as having a contrary 
tendency. We must be content with furnishing the reader with 
an epitome of the rules which Hufeland lays down. The more a 
man follows nature, and is obedient to her laws, the longer he 
will live ; the further he deviates from these the shorter will be 
his existence. This is one of the most general laws. Moderation 
in everything, the aurea mediocritas, so much extolled by Horace, 
and which Hume calls the best thing on earth, is indeed of the 
utmost efficacy in prolonging life. In a certain mediocrity of 
condition, climate, health, temperament, constitution, employment, 
spirits, diet, &c, lies the greatest secret for becoming old. By 
all extremes, either too much or too little, too high or too low, 
prolongation of life is impeded. 

After carefully noting the foregoing requirements, Hufeland 
asks the reader to permit him to delineate the portrait of a man 
destined to long life — and who is not anxious to see and study 
the portrait ? 

" He has a proper and well-proportioned stature, without, however, being too 
tall. He is rather of the middle size, and somewhat thick-set. His com- 
plexion is not too florid : at any rate too much ruddiness in youth is seldom 
a sign of longevity. His hair approaches rather to the fair than the black ; 
his skin is strong, but not rough. His head is not too big; he has large veins 
at the extremities, and his shoulders are rather round than fiat. His neck is 
not too long ; his abdomen does not project ; and his hands are large, but not 
too deeply cleft. His foot is rather thick than long ; and his legs are firm 
and round. He has also a broad arched chest ; a strong voice, and the faculty 
of retaining his breath for a long time without difficulty. In general, there is 
a complete harmony in all his parts. His senses are good, but not too delicate : 



CONCLUSION. 155 

his pulse is slow and regular. His stomach is excellent, liis appetite good, and 
his digestion easy. The joys of the table are to him of importance ; they 
tune Ids mind to serenity, and his soul partakes in the pleasure which they 
communicate. He does not eat merely for the sake of eating ; but each meal 
is an hour of daily festivity ; a kind of delight, attended with this advantage, 
with regard to others, that it does not make him poorer, but richer. He eats 
slowly, and has not too much thirst. Too great thirst is always a sign of rapid 
self-consumption. In general, he is serene, loquacious, active, susceptible of 
joy, love, and hope ; but insensible to the impressions of hatred, anger, and 
avarice. His passions never become too violent or destructive. If he ever 
gives way to anger he experiences rather an useful glow of warmth, an ' 
artificial and gentle fever, without an overflowing of the bile. He is fond also 
of employment, particularly calm meditation and agreeable speculation, is an 
optimist, a friend to nature and domestic felicity, has no thirst after honors 
or riches ; and banishes all thoughts of to-morrow." 

With the exception of a little too much force of color in the 
last touch or two, we think the portrait an exceedingly happy and 
good one. 



DIVISION" III 



THEOKY AND PEAGTICE OF LIFE ASSURANCE. 

INTRODUCTORY. 

The theory of Life Assurance is based upon the condition of 
equalising, in a pecuniary sense, the risks of life. The practice, 
of course, aims at the realisation of the theory. The actuary, 
by the aid of his formulae demonstrates, most unmistakeably, 
the soundness of the one, and the practicability of the other. 

The supposition upon which the theory of Life Assurance is 
founded involves, or rather pre-supposes, another condition, 
namely, that of accurately measuring the risks, or in other words, 
the duration of life : for it would be impossible to equalise that 
which cannot be measured. This brings us at once to the subject 
of Mortality Tables ; some account of which becomes necessary 
for the further understanding of the subject. 

CHAPTER I. 

MORTALITY TABLES, THEIR USES, CONSTRUCTION, AND 
DIFFERENCES. 

The Life, or Mortality Table, is the key-stone or pivot upon 
which the whole science of Life Assurance hinges. Until this 
was invented the business of assuring lives was entirely a specu- 
lative one. It could be nothing else. There was no correct 
measure of the duration of human life at its various progressive 
stages : the risk was, therefore, undefined ; and the rate of pre- 
mium to be charged was necessarily arbitrary. The Offices 
would naturally protect themselves : therefore, the injury or loss 
fell upon the assured. We have already seen this in the case of 
the earlier Societies. Dr. Farr speaks of the Life Table as of 
equal importance in all enquiries connected with human life or 
sanitary improvements, as the barometer or thermometer or 
similar instruments in physical research ; and the comparison is 
a good one. For even assuming a Society to have arrived at an 
equitable rate of premium for assuring lives, the Mortality Table 
is still required for the purpose of ascertaining the value of such 



EXPLANATION OF TEEMS. 157 

premiums, for a prospective terms of years as against the value 
of the sums assured thereby, in order that statements of assets 
and liabilities may be from time to time prepared, and the finan- 
cial aspect of the Society accurately determined. Without this 
no division of "profits" could ever be made, for the simple 
reason that it would be impossible to ascertain the amount of 
the surplus funds :* or indeed whether there was any surplus at 
all. The Life Table is, in fact, absolutely essential for " the solu- 
tion of all questions depending upon the duration of human 
life." 

The process of adjustment or graduation by which a Life 
Table is made to represent as nearly as possible the progress of 
a human generation year by year through life, is employed upon 
the same principle that astronomers " reduce," as it is termed, 
all their observations to some common event or epoch. " By 
the term correcting or equating observations for nutations," says 
Herschel, " is always understood in astronomy the getting rid of 
a periodical cause of fluctuation and presenting a result, not as it 
was observed, but as it would have been observed had that cause of 
fluctuation had no existence." The same process has to be em- 
ployed in the construction of Mortality Tables. A simple in- 
stance may be furnished. Between the ages of 15 and 25, and 
indeed up to later ages, the mortality is kept down in towns by 
the influx of healthy people (chiefly females) from the country : 
thus in London the annual mortality amongst young women, 
between the ages named, is only 6 per 1,000 ; while in the sur- 
rounding counties the mortality at the same age is from 7 to 8 
per 1,000 ; and amongst young men in London, at the like age, 
it is 8 per 1,000. The solution is found in the fact that healthy 
young women of these ages go from the country into London, 
and other large towns, and obtain situations, and frequently, if 
they are taken ill, go back into the country to die. The effect is 
to make towns look more healthy than the country, at these 
ages. Mortality Tables, constructed upon extensive data from 
town and country life, would not be materially affected by such 
fluctuations. Those based upon town observations only are 
certain to be more or less so, unless subjected to the processes 
just enumerated. They would, in fact, exhibit fictitious decre- 
ments at the ages enumerated if this " correction " — which im- 
plies the preceding processes — were omitted. 

In former days these causes of fluctuation were not so well 
understood as now. A notable instance of this occurred in the 
construction of the Northampton Tables, by Dr. Price, and one 
which proves how trivial a circumstance may lead to important 
results for good or evil. At the time the data for this Table was 
recorded, there existed in the town of Northampton, as now, 
great numbers of Baptists, who repudiated infant baptism, and 

* A distinction must be drawn between the "Accumulated Fund" and the "Surplus 
Fund :" the former applies to the total funds of a Society— the latter to the amount in hand 
after providing for all liabilities. 



158 CAUSES OF FLUCTUATION EXPLAINED. 

thus, by reducing the ratio of the christenings to the births, 
" induced Dr. Price to believe that the population remained sta- 
tionary ; whereas, it is shown from other sources, that it was, 
like the staple shoe-trade of the town, constantly increasing,"* 
The average lifetime in that town, when the observations were 
taken, was in reality about 30 years. Dr. Price, chiefly by reason 
of the above circumstance, assumed it to be, by his Tables, only 
24. It is now 37^-, or 13 {one-half) more than he took it to be ! 
And as a curious confirmation of the error, the mortality of the 
Equitable Society (which as we know first used the Northampton 
Table) was one-third less than that Table predicted. But the most 
serious part of the business remains yet to be told. The Govern- 
ment adopted these Tables as the basis for its annuity schemes. 
The same error which gave the Equitable, and other Societies 
using the Table, one-third too much premium, induced the Gov- 
ernment to grant annuities by one-third too large for the price 
charged, and before the error was rectified, about two millions of 
money was lost to the country by these annuity transactions. 

This last fact furnishes a sufficient instance of the necessity for 
extended observation in order to obtain a thoroughly reliable 
basis, where such large interests are involved. " It can never be 
safe," said Mr. Morgan, in one of his earliest addresses to the 
Court of the Equitable Society — " It can never be safe to substi- 
tute conjecture for inquiry." No method of logical reasoning — 
no theory of philosophic speculation — can ever furnish us with 
reliable results for assurance purposes. This has already been 
proved in the case of most of the early Societies : although one 
cannot fail to be struck with the marvellous accuracy of some of 
the conjectures of their founders. But now, by the aid of care- 
ful observations, taken at various places, at various times, and 
by various persons, such a mass of data has been collected, pre- 
senting such a unity of results, as can hardly fail to create abso- 
lute astonishment in the minds of the newly initiated. 

Mortality Tables, then, are obtained by observing the opera- 
tions of the law of mortality, and by analysing, collating, and 
" correcting " the results so obtained. The process is both mathe- 
matical and scientific. The observations in a certain district will 
determine the mean duration of life in that district ; and if a num- 
ber of districts be observed upon, they will probably furnish 
something like a correct estimate of the mean duration through- 
out the entire kingdom. By the "mean duration" of life is 
meant the total number of years, or fractional parts of years, or- 
dinarily attained by human beings. Thus, suppose the ages of 
100,000 persons be accurately recorded at the time of their death, 
and the respective ages be cast into one aggregate sum, and this 
sum be divided by 100,000, the quotient — the hundred-thou- 
sandth part of the whole — would be called the mean duration of 
life of the persons so enumerated. If the number of lives be small, 

* Dr. Farr.— The present system of "Registration " removes or obviates such difficulties. 



FIRST OUTLINE OF A MORTALITY TABLE. 159 

oi the period of observation be but short, the results will be likely 
to be far less accurate than if the numbers observed upon be 
large, and a fair time allowed for the observations. 

The first idea, or outline of a Mortality Table in this kingdom, 
was undoubtedly traced by Graicnt, whose career and speculations 
we have reviewed in a previous division. In his observations on 
the bills of mortality (1662-1676,) he says, "We have found that 
of 100 quick conceptions, about 36 of them die before they be 6 
years old, and that, perhaps, but one surviveth 76." He then 
produces figures to show, that " of all which have been conceived," 
there were alive at the time he wrote but " 40 per cent, above 16 
years old," and " 25 above 26 years old." But as we have no 
proof that these deductions were based upon any recorded facts, 
or that they were indeed anything more than the surmises of a 
shrewd and clever observer, no scientific value has been attached 
to them, although a history of mortality observations can be hardly 
considered complete which entirely overlooks them. So, again, 
with the recorded Table of the Praetorian Frsefect, TJlpianus (Ul- 
pian), "one of the most eminent commentators on the Justinian 
Code ;" of the origin of which Table Mr. Hendriks has given the 
following particulars. About the time of the division of the Ro- 
man Empire (a.d. 364) theJ^alcidian law was in force, which pre- 
vented a testator from leaving more than three-fourths of his pro- 
perty to any others than legally constituted heirs. The Roman 
lawyers, therefore, found it necessary to consider and frame a 
Table by which annuities could be valued so as to meet the re- 
quirements of this law. It was then that Ulpian produced the 
Table given below, and which, considering its general accuracy, 
affords considerable room for conjecture as to how the materials 
for constructing the Table were obtained. We know, and have 
already referred to the fact, that in the Roman Empire careful 
enumerations of the people living, from time to time, took place. 
But we have also seen that for the construction of Mortality 
Tables a careful record of the number of births and deaths, and 
also of the ages at death, is required; and we have no knowledge 
that a record of births was observed, although we have previous- 
ly noticed that deaths, at least when above a certain age, were 
recorded. 

By whatever means Ulpian obtained his data, the results show 
"no mean skill and discrimination" on his part; and their ap- 
proximation to results obtained from other (although perhaps not 
very dissimilar) data many centuries afterwards, is not the least 
remarkable feature in connection with them. It will occur to 
many of our readers that in modern Tables for the valuation of 
annuities, (as indeed for all purposes of Life Assurance,) interest 
is a very important element in the calculation. Ulpian's Table 
bears no evidence of the existence of this element of considera- 
tion ; and it is the opinion of the best writers that the Table must 
be looked upon simply as recording the expectation of life at that 



160 



EXPECTATION" OF ROMAN LIFE. 



period : on which view " it is manifest that the old Roman juris- 
prudence gave far more correct views of the comparative value 
of life at different ages than the moderns possessed, in a popular 
way, until nearly the close of the 17th century."* 

Here is the Table, and side by side with it, the expectation of 
life (male and female), as deduced by Dr. Price from the propor- 
tions of the living to the numbers who died in Stockholm at all 
ages for nine years, from 1755 to 1763 : — ■ 





Expectation of 




Expectation of 


Expectation of 




Males and Females. 




Males. 


Females. 


Ages. 


Koman Life. 


Ages. 


Stockholm Life. 


Stockholm Life. 




(Ulpian. ) 




(Dr. Price.) 


(Dr. Price.) 


Birth to 20 


30 years. 


Birth. 


14 years. 


18 years. 


20 " 25 


28 " 


5 


31 " 


37 " 


25 " 30 


25 " 


10 


30 " 


37 " 


30 " 35 


22 " 


15 


27 " 


33 " 


35 " 40 


20 " 


20 


24 " 


30 " 


40 " 41 


19 « 


25 


21 « 


27 " 


41 " 42 


18 " 


30 


19 " 


24 " 


42 " 43 


17 " 


35 


18. " 


22 " 


43 " 44 


16 " 


40 


16 " 


19 " 


44 «. 45 


15 " 


45 


14 " 


17 « 


45 '* 46 


14 " 


50 


12 " 


15 « 


46 " 47 


13 " 


55 


10 " 


13 « 


47 " 48 


12 " 


60 


9 " 


10 " 


48 " 49 


11 " 


65 


7 " 


8 '? 


49 " 50 


10 « 


70 


6 " 


6 " 


50 " 55 


9 " 


75 


4 « 


4 " 


55 " 60 


7 " 








60 and upwards 


5 " 









The resemblance is seen to be greater with the females than 
the males up to age 40, and afterwards the reverse. This would 
seem rather to lessen the force of a supposition by some writers, 
that as the Roman enumerations were taken for the purposes of 
estimating the power of the country for recruiting her legions of 
warriors, the observations were more particularly confined to the 
males. These considerations, however, we leave to more learned 
heads. 

The earliest English Life Table, properly so called, was inven- 
ted by Halley, the " illustrious astronomer," who " first ventured 
to predict the return of a comet, which appeared accordingly in 
1759." "By this simple and elegant Table," says Dr. Farr, "the 
mean duration of human life, uncertain as it appears to be, and as 
it is with reference to individuals, can be determined with the 
greatest accuracy in nations, or in still smaller communities." 
The form is here referred to, not the method of construction, 

* Hendriks. Since this was written some talented observations have been made npon 
TJlpian's Table, and the data on which it might be founded, by W. B. Hodge, Esq., vide vol. 
6 Assurance Magazine, p. 313-14 ; also in an able article in the 8th ed. of the Encyclopaedia 
Britannica on " Life Assurance, 1 ' attributed to William Thomas Thomson, Esq., the Actuary 
of the Standard and Colonial Offices. The concluding paragraph says, "It seems abundantly 
evident that Ulpianus' estimate must have been based on actual observations in some form, 
but the Komans must have had a miserable chance of life in old age." 



HALLEY AND THE FIRST ENGLISH LIFE TABLE. 161 

which has been considerably improved. " Dr. Halley," says Mr. 
Pocock, " first showed how the price to be paid for the Assurance 
of a life might be justly and scientifically regulated, and pointed 
out the real odds between assuring the life of a man aged 20, 
and that of another aged 50 ; his Table proving it to be 100 to 1 
that the former, and little more than 30 to 1 that the latter, would 
not die in a year."* 

After Halley had computed his Mortality Table, he proceeded 
to form Annuity Values, and succeeded in doing so ; but as he 
computed at one rate of interest only, 6 per cent., and the values 
were given for every fifth year merely, his results were very limi- 
ted in their application. From this period the subject of Life 
Annuities grew gradually into note.f 

We cannot pass over this period without reverting to the early 
speculations of De Wit. In a recent publication his claims and 
those of Halley have been compared and commented upon with 
singular ability and fairness. 

" Dr. Halley may be designated, then, the discoverer and scientific arranger of 
what are called Life Tables ; but there is no doubt that De Wit preceded him 
by some years in the elimination of a method by which the true value of a 
Life Annuity could be obtained. Halley was more scientific than De Wit ; but 
there is no occasion to place the one above the other — they both made impor- 
tant discoveries and valuable additions to our knowledge, and without clashing 
they may be referred to as the originators of the application of the doctrine of 
probabilities of life and death to practical uses.":}: 

The relative and oft-disputed claims of Simpson and De Moivre 
are disposed of with similar brevity : — 

" The whole subject is treated by Mr. Simpson in a much more perspicuous 
manner than by any previous writer. His formulae are general, and adapted to 
any Table of Mortality, and although De Moivre portrayed the method of 
obtaining the Annuities on lives of a younger age, from the values at the im- 
mediately preceding age, still we must allow that the advancement of the 
science is more attributable to Simpson than to De Moivre." 

Simpson was of opinion that the Breslau Table was in no way 
applicable to London ; hence probably his reason for compiling 
his London Table of Mortality. 

The following Tables are constructed upon precisely the same 
plan as Halley's. We have selected the Carlisle and English 
Tables for examples, because the former is that used by the majo- 
rity of the existing Offices ; while the latter is that which will 
most probably be used by Offices to be hereafter established. In 
each case 10,000 lives are taken for observation, and the deaths to 
the number remaining alive at the commencement of each year is 
shown, until the entire number is exhausted. The results are 
placed in parallel columns, for the purposes of comparison here* 
after. § It will be observed that they do not vary very much ; but 

* Pocock on Life Assurance. t Vide W. T. Thomson on Life Assurance, 

% W. T. Thomson on Life Assurance,1856. § See Tal>le on. next page. 



162 



THE CARLISLE AND ENGLISH LIFE TABLES. 



Carlisle Table. 


English Life 
No.' I 


Table. 


Carlisle Table. 


English Life 
No. I. 


Table. 


MALE AND FEMALE. 


MALE AND FEMALE. 


MALE AND FEMALE. 


MALE AND FEMALE. 




las 






o 






o 


6 il 




o 




Age. 




£ c j| 
55 *" 


s 3 *.> 


Age. 


Ill 


&^ 55 


Age. 


'5 g.£ 
1 c| 


ti = 


Age. 






10000 


1539 





10000 


1463 


53 


4211 


68 


53 


4434 


76 


1 


8461 


682 


1 


8536 


526 


54 


4143 


70 


54 


4358 


78 


2 


7779 


505 


2 


8010 


271 


55 


4073 


73 


55 


4279 


84 


3 


7274 


276 


3 


7739 


185 


56 


4000 


76 


56 


4194 


90 


4 


6998 


201 


4 


7553 


133 


57 


3924 


82 


57 


4103 


96 


5 


6797 


121 


5 


7420 


104 


58 


3842 


93 


58 


4007 


101 


6 


6676 


82 


6 


7315 


83 


59 


3749 


106 


59 


3906 


106 


7 


6594 


58 


7 


7232 


67 


60 


3643 


122 


60 


3799 


112 


8 


6536 


43 


8 


7164 


56 


61 


3521 


126 


61 


3687 


117 


9 


6493 


33 


9 


7108 


46 


62 


3395 


127 


62 


3569 


123 


10 


6460 


29 


10 


7061 


39 


63 


3268 


125 


63 


3446 


128 


11 


6431 


31 


11 


7022 


36 


64 


3143 


125 


64 


3318 


133 


12 


6400 


32 


12 


6985 


35 


65 


3018 


124 


65 


3185 


138 


13 


6368 


33 


13 


6950 


41 


66 


.2894 


123 


66 


3046 


142 


14 


6335 


35 


14 


6909 


46 


67 


2771 


123 


67 


2904 


147 


15 


6300 


39 


15 


6862 


49 


68 


2648 


123 


68 


2759 


150 


16 


6261 


42 


16 


6813 


50 


69 


2525 


124 


69 


2606 


153 


17 


6219 


43 


17 


6762 


51 


70 


2401 


124 


70 


2453 


156 


18 


6176 


43 


18 


6710 


52 


71 


2277 


134 


71 


2297 


157 


19 


6133 


43 


19 


6658 


52 


72 


2143 


146 


72 


2139 


158 


20 


6090 


43 


20 


6605 


53 


73 


1997 


156 


73 


1981 


158 


21 


6047 


42 


21 


6552 


54 


74 


1841 


166 


74 


1823' 


156 


22 


6005 


42 


22 


6497 


55 


75 


1675 


160 


75 


1666 


154 


23 


5963 


42 


23 


6442 


56 


76 


1515 


156 


76 


1512 


151 


24 


5921 


42 


24 


6386 


56 


77 


1359 


146 


77 


1360 


146 


25 


5879 


43 


25 


6329 


57 


78 


1213 


132 


78 


1214 


140 


26 


5836 


43 


26 


6271 


58 


79 


1081 


128 


79 


1073 


134 


27 


5793 


45 


27 


6213 


59 


80 


953 


116 


80 


939 


126 


28 


5748 


50 


28 


6154 


60 


81 


837 


112 


81 


813 


117 


29 


5698 


56 


29 


6094 


60 


82 


725 


102 


82 


696 


108 


30 


5642 


57 


30 


6033 


61 


83 


623 


94 


83 


588 


98 


31 


5585 


57 


31 


5971 


62 


84 


529 


84 


84 


490 


87 


32 


5528 


56 


32 


5909 


63 


85 


445 


78 


85 


402 


77 


33 


5472 


55 


33 


5845 


63 


86 


367 


71 


86 


324 


67 


34 


5417 


55 


34 


5782 


64 


87 


296 


64 


87 


257 


57 


35 


5362 


55 


35 


5717 


65 


88 


232 


51 


88 


200 


47 


36 


5307 


56 


36 


5651 


66 


89 


181 


39 


89 


152 


38 


37 


5251 


57 


37 


5585 


66 


90 


142 


37 


90 


114 


31 


38 


5194 


58 


38 


5518 


67 


91 


105 


30 


91 


82 


24 


39 


5136 


61 


39 


5451 


68 


92 


75 


21 


92 


58 


18 


40 


5075 


66 


40 


5382 


69 


93 


54 


14 


93 


40 


13 


41 


5009 


69 


41 


5313 


69 


94 


40 


10 


94 


27 


9 


42 


4940 


71 


42 


5243 


70 


95 


30 


7 


95 


17 


6 


43 


4869 


71 


43 


5173 


71 


96 


23 


5 


96 


11 


4 


44 


4798 


71 


44 


5102 


71 


97 


18 


4 


97 


6 


2 


45 


4727 


70 


45 


5030 


72 


98 


14 


3 


98 


4 


1 


46 


4657 


69 


46 


4957 


73 


99 


11 


2 


99 


2 




47 


4588 


67 


47 


4884 


73 


100 


9 


2 


100 


1 




48 


4521 


63 


48 


4811 


74 


101 


7 


2 


101 


1 




49 


4458 


61 


49 


4736 


74 


102 


5 


2 


102 






50 


4397 


59 


50 


4662 


75 


103 


3 


2 


103 






51 


4338 


62 


51 


4586 


75 


104 


1 


1 


104 






52 


4276 


65 


52 


4511 


76 












i 



THE CARLISLE AND ENGLISH LIFE TABLES. 163 

the Carlisle Table shows the lightest mortality, except at the 
extreme ages : namely, from to 5, and from 74 down to the end 
of the Table, with the exception of one or two years. The mini- 
mum mortality in the Carlisle Table occurs at the age of 10 ; in 
the English Table at 12. This form of Table must be based upon 
actual observation, in the district or county to which it relates : 
the fluctuations being " corrected " by the processes already indi- 
cated. It is the preliminary step, or the basis from which other 
Tables are to be produced. 

By these Tables the probable duration of life may be seen at a 
glance — it is the time when the number observed upon is reduced 
to one half. In the Carlisle Table this occurs at 41 ; in the Eng- 
lish Table at 45. As the English Life Table is the most recently 
constructed, and has been drawn from the mortality of the entire 
kingdom, it may be presumed to present more accurate results 
than any other existing Table : we shall therefore confine our ex- 
amples chiefly to it. This Table shows the number reduced to 
5,030 at 45 — at 45j they would be reduced just below 5,000. It 
is therefore " an even wager," or risk, on the birth of a child, that 
it will live 45^- years — the chances of its living to, or dying before, 
that age being as nearly as possible equal. How long is it pro- 
bable that a person aged 20 will live ? The number living at age 
20 is 6,605, the half of which is 3,302. Now if we look down the 
column until we find the number nearest to this last, it is at age 
64: the probable duration is therefore 44 years: 20 and 44 = 64. 
Again, what is the probable life of a person at 60 ? The same 
process is gone through. The number against the age is 3,799 : 
the half 1,899. Looking down the Table we find 3,799 has be- 
come reduced to 1,899 at age 74 : at 60, therefore, it is probable 
a man will live 14 years. The Table may be used in a similar 
manner for any other ages, although it is quite unnecessary, ex- 
cept for the purpose of becoming familiar with the process, as we 
shall presently give a Table of the " Mean Expectation " of life at 
all ages, which differs slightly from what is termed the probable 
duration of life, by reason of certain " corrections " to which the 
results have to be submitted. This is precisely the plan upon 
which Halley proceeded. 

In the days when " wagering assurances " were at their height, 
it was of importance to the policy-mongers to know not simply 
the expectation of life at various ages, but also the " odds," or 
chances of life against death at various ages. These Halley also 
deduced from his Table. His plan was to divide the number of 
persons remaining after the age of any individual life, by the dif- 
ference between that number and the number living at the age to 
which it is proposed he should live. As his Tables stated 567 out 
of 1,000 persons to be living at the age of 25, and 560 at the age 
of 26, a person of the former age had the chance of 560 to 7, or 
80 to 1, that he would not die ivithin the year. Again, for ascer- 
taining the chance that any person would not die before he should 



164 THE CHANCE IN EAV0R OF LIFE. 

arrive at any given age, divide the number of persons alive at 
that age, by the difference between that number and the number 
of those living at the age of the individual : — for instance, to de- 
termine the chance that a person aged 40 should live 7 years 
longer, the Table showed 445 persons to be living at 40, and 377 
at 47 ; the difference between which numbers is 68, and the chance 
in favor of life is 377, divided by 68, or about 5| to 1.* 

Addison, in his " Vision of Mirza," writing probably with a 
graduated Life Table before him of the sort just given (for Halley 
had then published his Table) introduces the following allegory : — 

" The bridge thou seest, said he, is Human Life ; consider it attentively. 
Upon a more leisurely survey of it, I found that it consisted of three score and 
ten entire arches, with several broken arches, which, added to those that were 
entire, made up the number about an hundred. As I was counting the arches, 
the Genius told me that this bridge consisted at first of a thousand arches ; but 
that a great flood swept away the rest, and left the bridge in the ruinous con- 
dition I now beheld it. But tell me further, said he, what thou discoverest on 
it. I see multitudes of people passing over it, said I, and a black cloud hang- 
ing on each end of it. As I looked more attentively, I saw several of the pas- 
sengers dropping through the bridge into the great tide that flowed under- 
neath it ; and upon further examination perceived that there were innumera- 
ble trap-doors that lay concealed in the bridge, which the passengers no sooner 
trod upon, but they fell through them into the tide, and immediately disap- 
peared. These hidden pit-falls were set very thick at the entrance of the 
bridge, so that throngs of people no sooner break through the cloud, but 
many of them fall into them. They grew thinner towards the middle, but 
multiplied and laid closer together towards the end of the arches that were en- 
tire. There were indeed, some persons, but their number was very small, that 
continued a kind of hobbling march of the broken arches, but fell through one 
after another, being quite tired and spent with so long a walk."f 

Those who take the trouble to look carefully at the preceding 
Tables, will discover the beautiful simplicity of this description. 
It more particularly illustrates the third column of the Table ; 
namely, that which shows how many may be expected to die 
in each year. The "three score and ten entire arches," refers to 
the supposed scriptural limitation of human life, and the "broken 
arches" to those who survive to longer periods. The " thousand 
arches" of course relates to the ages of the Patriarchs ; and the 
" great flood" to the deluge, in conformity with a prevailing no- 
tion that the period of human life was considerably lessened after 
that event. It is probable, however, that the real change was in 
the mode of recording time, and not in the physiological laws relat- 
ing to the human race. " Our Life Table," says Dr. Farr, " follows 
'a throng' of 100,000 (toe have taken 10,000 only) that 'brake 
through the cloud' into life at the same moment, and counts 
them as they step on every arch. It shows, therefore, how many 
fall through the ' hidden pit-falls.' The danger is exactly mea- 
sured. The arches over which sickly multitudes pass, are the 
same in n amber as those traversed by a healthy people; but the 
' trapdoors' and 'hidden pit-falls' in their way are twice as nu- 

* Pocock on Life Assurance, t The " Spectator," No. 159, published 1711. 



PROBABILITY OF LIFE AT VARIOUS AGES. 



165 



merous, though they can only be perceived by careful observa- 
tion and counting ; while a difference of 26 and 45 ' arches' would 
be obvious to the unassisted eye." 

But we have seen, in a previous division, that a difference 
exists in the duration of male and female life ; and it has been 
thought desirable to demonstrate this difference by Tables, con- 
structed on distinct observations of the sexes. The following 
Table furnishes the result. It is based upon the same data as the 
English Life Table just referred to, but the example is extended 
to 100,000 of each sex, that the differences may be more easily 
apparent ; and to save space the quinquennial results only are 
given after the first five years, except where necessary to illus- 
trate the examples which follow : — 



Age. 


Living at each 
year of age. 


Males. 


Females. 


Dying in the 
next year. 


Males. 


Females. 





100,000 


51,274 


48,726 


14,631 


8170 


6461 


1 


85,369 


43,104 


42,265 


5,267 


2716 


2551 


2 


80,102 


40,388 


39,714 


2,710 


1370 


1340 


3 


77,392 


39,018 


38,374 


1,853 


954 


899 


4 


75,539 


38,064 


37,475 


1,338 


679 


659 


5 


74,201 


37,385 


36,816 


1,047 


542 


505 


10 


70,612 


35,564 


35,048 


392 


179 


213 


12 


69,856 


35,206 


34,650 


351 


178 


173 


15 


68,627 


34,573 


34,054 


497 


240 


257 


20 


66,059 


33,324 


32,735 


537 


264 


273 


25 


63,295 


31,958 


31,337 


576 


287 


289 


30 


60,332 


30,473 


29,859 


617 


312 


305 


35 


57,172 


28,867 


28,305 


654 


335 


319 


40 


53,825 


27,145 


26,680 


691 


358 


333 


45 


50,301 


25,311 


24,990 


724 


379 


345 


50 


46,621 


23,376 


23,245 


753 


398 


355 


55 


42,796 


21,355 


21,441 


849 


449 


400 


60 


37,996 


18,808 


19,188 


1,122 


592 


530 


65 


31,852 


15,589 


16,263 


1,383 


717 


666 


66 


30,469 


14,872 


15,597 


1,427 


737 


690 


70 


24,531 


11,823 


12,708 


1,560 


792 


768 


73 


19,814 


9,439 


10,375 


1,581 


791 


790 


75 


16,664 


7,867 


8.797 


1,544 


764 


780 


80 


9,398 


4,316 


5,082 


1,262 


604 


658 


85 


4,021 


1,780 


2,241 


774 


355 


419 


90 


1,140 


481 


659 


311 


135 


176 


95 


174 


69 


105 


64 


25 


39 


100 


16 


7 


9 


6 


2 


4 


105 


1 


— 


— 


1 


— 


— 



The minimum mortality for both males and females occurs (by 
this Table) in the 12th year. But while the probable life of a boy 
is only 44 years, that of a girl is 47. The probable life at various 
ages is ascertained precisely in the same manner as in the other 
Table, although, as the sexes are here distinguished, the results 
will be different. The " probable" life of a woman, aged 25, is 
found by glancing down the fourth column. The figures opposite 



166 , CONFLICTING RESULTS. 

that age are 31,337. The nearest number to the half of this is 
found at age 66 (15,597), therefore, the probability is 25 from 66, 
or 41 years. So the probable life of a man at 60 is found by 
glancing down the third column, where the No. 18,808 is ob- 
tained ; the half is found at age 73, showing the probable life to 
be 13 years. 

As the Tables we have just given form the basis for determin- 
ing the " expectation" of life, and also the foundation from which 
all annual and other life premiums are deduced, it should be un- 
derstood that there are at least two ways of constructing them. 
First : By a comparison of the deaths and the living at each age, 
which gives the rate of mortality and survivorship. Secondly : from 
the deaths alone, or with reference only to the ages at which the 
deaths have taken place. "Tables constructed on the former 
plan," Dr. Price says, "must be correct." But, unfortunately, 
from the want of proper materials, both himself and Dr. Halley 
had to adopt the second plan. Dr. Fan* says, " The mortality 
obtained by dividing the deaths by the living (as in the first ex- 
ample) is an unimpeachable test y it is the preliminary to the 
construction of a true Life Table." And he adds, "The ratio of 
the total deaths to the total population affords the next best test 
that can be employed," Professor De Morgan says, " If in any 
one year a complete census were made registering the age of every 
individual, and if the deaths which took place in the 365 days next 
following the day of the census were noted, the law of mortality 
could be deduced." This is a reiteration of the first of the above 
plans, and is that upon which the English Life Table was con- 
structed. Tables constructed upon the second plan " are only 
correct if the population of the place, among whom the deaths 
occur, is stationary ; if the births and deaths are equal ; and if 
there be no disturbing migration for a century" — events very 
rarely to be met with. The most conflicting results are necessa- 
rily obtained by incomplete observations : — thus while Mr. Fin- 
laison's Table makes females at 20 live 44 years, and males 3 8 J, 
the "Experience" Table presents a result exactly the reverse : fe- 
males selected for assurance at 20 have according to this Table an 
expectation of nearly 36 years ; males of very nearly 40 years.* 
In the one case the observations were confined to Government 
annuitants ; in the other to assured lives in a limited number of 
Offices only. In both cases the area of observation was no doubt 
too small. 

The desirability of having Life Tables based upon the mortality 
returns of the whole kingdom — or what may properly be termed 
national Life Tables — was pointed out by Mr. Baily at the com- 
mencement of the present century ; and the English Life Table has 
the advantage of being so constructed. It shows out of 100,000 
(or 10,000) children born alive, the respective number of males and 

* Fifth Report of Registrar-General. 



RULE FOE ASCERTAINING THE EXPECTANCY OF LIFE. 167 

females born, and the numbers attaining each age, or birth-day, 
from the 1st to the 110th according to the rate and laws of mor- 
tality, deduced from the returns of the population, births, and 
deaths in England in 1841. Thus, in 100,000 children born alive, 
51,274 are boys, and 48,726 girls; 33,060 males and 32,464 females 
attain the age of 21 ; and 11,824 males, and 12,708 females live to 
70. The males and females are not distinguished in Halley's 
Table, in the Northampton Table, or the Carlisle Table. In the 
Swedish Table, however, Dr. Price did distinguish males and 
females, making 10,000 of each sex the basis of his observations. 

We may now introduce the reader to the next stage in the 
development of Mortality Tables ; namely, that which, after the 
processes of equating and correcting, furnishes the actual expecta- 
tion of life at all ages, from birth upwards. This is by far the 
most interesting Table* to the general reader ; and it is otherwise 
of great value. By its aid the pecuniary value of leases, advow- 
sons, and all matters or things dependent upon the duration of 
human life may be determined ; the question or rate of interest, 
however, being always an important element. But, independently 
of these, the Table possesses intrinsic interest on account of the 
curious facts it discloses regarding the duration of life. 

We shall confine our examples chiefly to the results of the Eng- 
lish Table, as given in the last three columns, although, for the 
purposes of comparison, and to avoid repetition, we have placed 
the Northampton and Carlisle expectancies in parallel columns. 

The expectation from being 41 years and 2 months (sexes com- 
bined) at birth (per English Life Table) has increased at the end 
of the first year to 47 years and 2 months, while by the end of 
the 4th year it has come to be 50 years and 1 month, or just upon 
nine years greater than it was at birth four years previously. 
Such is the result of having escaped the dangers of childhood. 
From this maximum point, however, it steadily grows less, year 
by year — not that every year a man lives lessens his expectation 
so much, as may be seen by the Table — until at 90 it is reduced 
to two yea?s and nine months — or, dividing the sexes, to two 
years and eight months for males, and two years and nine months 
for females, being only one month difference. The Northampton 
Table gives an expectation of only 25 years and 2 months at birth, 
and its maximum (at the completion of the sixth year) is only 41 
years and 1 month, being 10 years and 2 months less than the 
maximum of the Carlisle Table, age 5 ; and exactly 10 years less 
than the English Table, at its maximum age 4. The above ex- 
pectancy is not that of the original Northampton Table, but of 
the one Avhich, after various corrections, was published by Dr. 
Price, in the fourth edition of his famous work on Reversionary 
Payments and Annuities, published about 1783. 

* See Table on next page. 



168 



TABLE. 



TABLE 
Showing the " expectation " of Life at all Ages. 







Carlisle. ! English Life Table, No. 1. 






Carlisle. 


English Life Table, No. 1. 


Age. 


North- 












Age. 


North- 










ampton. 


Male and 
Female. 


Male and 
Female. 


Male. 


Female. 


ampton. 


Male and 
Female. 


Male and 
Female. 


Male. 


Female. 




Yrs. Ms. 


Yrs. Ms. 


Yrs. 


Ms. 


Yrs. Ms. 


Yrs. Ms. 




Yrs. Ms. 


Yrs. Ms. 


Yrs. Ms. 


Yrs. Ms. 


Yrs. Ms. 





25 2 


38 9 


41 


2 


40 2 


42 2 


53 


16 6 


19 


18 6 


18 


19 


1 


32 9 


44 8 


47 


2 


46 9 


47 7 


54 


16 1 


18 3 


17 10 


17 4 


18 4 


2 


37 10 


47 7 


49 


2 


48 10 


49 7 


55 


15 7 


17 7 


17 2 


16 8 


17 8 


3 


39 7 


49 10 


49 


11 


49 6 


50 4 


56 


15 1 


16 11 


16 6 


16 


17 


4 


40 7 


50 9 


50 


1 


49 9 


50 6 


57 


14 8 


16 3 


15 10 


15 5 


16 4 


5 


40 10 


51 3 


50 





49 8 


50 5 


58 


14 2 


15 7 


15 2 


14 9 


15 8 


6 


41 1 


51 2 


49 


9 


49 4 


50 1 


59 


13 8 


14 11 


14 7 


14 2 


15 


7 


41 


50 10 


49 


3 


48 11 


49 8 


60 


13 2 


14 11 


14 


13 7 


14 5 


8 


40 9 


50 3 


48 


9 


48 5 


49 1 


61 


12 9 


13 10 


13 5 


13 


13 9 


9 


40 4 


49 7 


48 


1 


47 9 


48 5 


62 


12 3 


13 4 


12 10 


12 8 


13 2 


10 


39 9 


48 10 


47 


5 


47 1 


47 10 


63 


11 10 


12 10 


12 3 


11 11 


12 8 


11 


39 2 


48 


46 


9 


46 4 


47 1 


64 


11 4 


12 4 


11 9 


11 4 


12 1 


12 


38 6 


47 3 


46 





45 6 


46 4 


65 


10 11 


11 9 


11 2 


10 10 


11 6 


13 


37 10 


46 6 


45 


2 


47 9 


45 7 


66 


10 5 


11 3 


10 8 


10 4 


11 


14 


37 2 


45 9 


44 


5 


44 


44 10 


67 


10 


10 9 


10 2 


9 11 


10 6 


15 


36 6 


45 


43 


8 


43 4 


44 1 


68 


9 6 


10 3 


9 8 


9 5 


10 


16 


35 10 


44 3 


43 





42 8 


43 5 


69 


9 1 


9 9 


9 3 


8 11 


9 6 


17 


35 2 


43 7 


42 


4 


42 


42 10 


70 


8 7 


9 2 


8 9 


8 6 


9 


18 


34 7 


42 10 


41 


8 


41 3 


42 1 


71 


8 2 


8 8 


8 4 


8 1 


8 7 


19 


34 


42 2 


41 





40 7 


41 6 


72 


7 9 


8 2 


7 11 


7 8 


8 2 


20 


33 5 


41 6 


40 


4 


39 11 


40 10 


73 


7 4 


7 9 


7 6 


7 4 


7 9 


21 


32 11 


40 9 


39 


8 


39 2 


40 2 


74 


6 11 


7 4 


7 1 


6 11 


7 4 


22 


32 4 


40 


39 





38 6 


39 6 


75 


6 6 


7 


6 9 


6 6 


6 11 


23 


31 11 


39 4 


38 


4 


37 10 


38 10 


76 


6 2 


6 8 


6 5 


6 2 


6 6 


24 


31 4 


38 7 


37 


8 


37 2 


38 2 


77 


5 10 


6 5 


6 


5 10 


6 2 


25 


30 10 


37 10 


37 





36 6 


37 6 


78 


5 6 


6 1 


5 8 


5 6 


5 10 


26 


30 4 


37 2 


36 


4 


35 10 


36 10 


79 


5 1 


5 10 


5 4 


5 3 


5 6 


27 


29 10 


36 5 


35 


8 


35 1 


36 2 


80 


4 9 


5 6 


5 1 


4 11 


5 J3 


28 


29 4 


35 8 


35 





34 6 


35 7 


81 


4 5 


5 3 


4 9 


4 8 


4 11 


29 


28 9 


35 


34 


4 


33 10 


34 11 


82 


4 1 


4 11 


4 6 


4 4 


4 7 


30 


28 3 


34 4 


33 


8 


33 2 


34 3 


83 


3 10 


4 8 


4 3 


4 1 


4 4 


31 


27 9 


33 8 


33 





32 6 


33 7 


84 


3 7 


4 5 


4 


3 11 


4 1 


32 


27 3 


33 


32 


4 


31 10 


32 11 


85 


3 4 


4 1 


3 9 


3 8 


3 10 


33 


26 9 


32 4 


31 


8 


31 2 


32 3 


86 


3 2 


3 11 


3 6 


3 5 


3 7 


34 


26 2 


31 8 


31 


1 


30 6 


31 8 


87 


3 


3 9 


3 4 


3 2 


3 4 


35 


25 8 


31 


30 


5 


29 10 


31 


88 


2 10 


3 7 


3 1 


3 


3 2 


36 


25 2 


30 4 


29 


9 


29 2 


30 4 


89 


2 8 


3 6 


2 11 


2 10 


3 


37 


24 8 


29 8 


29 


1 


28 6 


29 8 


90 


2 5 


3 4 


2 9 


2 8 


2 9 


38 


24 2 


29 


28 


5 


27 10 


29 


91 


2 1 


3 3 


2 7 


2 6 


2 7 


39 


23 7 


28 3 


27 


9 


27 2 


28 5 


92 


1 9 


3 5 


2 5 


2 5 


2 5 


40 


23 1 


27 7 


27 


2 


26 6 


27 9 


93 


1 4 


3 6 


2 4 


2 4 


2 3 


41 


22 7 


27 


26 


6 


25 11 


27 1 


94 


1 1 


3 7 


2 2 


2 3 


2 2 


42 


22 


26 4 


25 10 


25 3 


26 5 


95 


8 


3 7 


2 1 


2 2 


2 1 


43 


21 6 


25 9 


25 


2 


24 7 


25 9 


96 


6 


3 6 








44 


21 


25 1 


24 


6 


24 


25 1 


97 




3 3 








45 


20 6 


24 6 


23 10 


23 4 


24 5 


98 




3 1 






I 


46 


20 


23 10 


23 


2 


22 8 


23 9 


99 




2 9 








47 


19 6 


23 2 


22 


6 


22 


23 1 


100 




2 3 






i 


48 


19 


22 6 


21 


10 


21 4 


22 5 


101 




1 9 






| 


49 18 6 


21 10 


21 


2 


20 8 


21 9 


102 




1 4 








50,18 


21 1 


20 


7 


20 


21 1 


103 




10 






] 


5117 6 


20 5 


19 10 


19 4 


20 4 














52J 17 


19 8 


19 


2 


18 9 


19 9 












i 



THE LAW OF COMPENSATION. 169 

It may be useful to the reader to be acquainted with some short 
rule for arriving at the expectancy of life according to the three 
Tables we have given, which are those most in use, as the Tables 
cannot always be at hand for the purpose of reference. Speaking 
of the English Table first, at ages ranging from 20 or 25 up to 45, 
use the fixed nimiber 96 — deduct the present age of the person 
whose expectancy you desire to know from this number, and the 
half of the remainder will give the expectancy within a few months. 
Take for example the age 30 — that from 96 leaves 66 — the half of 
which is 33 — the Table gives only eight months more. For ages 
above 45 take 90 for the fixed number, and proceed as before. 
This applies to the sexes jointly. For females separately a year 
may be added to the fixed numbers given : for males a year taken 
off. By making the fixed numbers 97 and 91, they will apply to 
the Carlisle Table — or the mean of these, 94, may be taken as ap- 
plicable to all ages where exactitude is not of much importance. 
For the Northampton Expectation the fixed number may be 86, 
for all, except the ages over 75, when it may be raised to 90 : for 
the higher ages in this Table nearly correspond with the others. 

Of course the results in the preceding and other Tables which 
will be given, are based on an average of lives. Constitutions 
possessed of more than average strength will live beyond the 
average expectation, and vice versa. Where the circumstances 
are even, the variation will be nil, or nearly so. "We have, in the 
previous sections of this division, given numerous instances of 
the uniformity of operation everywhere observable in connection 
with mortality enquiries. But it may be well to pause here, and 
enquire how this uniformity is produced: otherwise we may 
attribute to it greater importance than it deserves, or at all events 
arrive at false conclusions regarding it. 

Dr. Fan* has very properly pointed out that this uniformity 
does not imply that the external circumstances in which men live 
have no influence on the duration of life; it only tends to prove 
that life being regulated by constant laws, the circumstances 
adverse or favorable to existence produce, by compensation of 
various kinds, the same results. Professor de Morgan says on 
the same subject : — 

" The fluctuations of mortality have of themselves a tendency to create 
opposite fluctuations. Thus, a very sickly season carries off the weak, and 
deprives the succeeding years of those who were most likely to have died ; 
causing therefore a season of remarkable health. This is a very important 
item in the theory of the fluctuations of mortality. ... It reduces annual 
fluctuation itself to a species of regularity, and is, perhaps, the sufficient 
reason for a slightness of the total fluctuations." 

It has been cited as an instance in support of these views, that 
the risk which females encounter at the child-bearing age is 
compensated for in males by the violent deaths they are subjected 
to during the same period on rivers, on the sea-coast, in mines, 
in the streets, in travelling, and in their dangerous occupations ; 



170 DATA ON WHICH THE LIFE TABLES ARE BASED. 

by the accumulation of workmen in ill-ventilated shops, or the 
hard exhausting work of the agricultural laborer, independently 
of war, and service in unhealthy climates. To these may be 
added mental agitations and anxieties, terminating unhappily 
sometimes in suicide — altogether making the chance of living 
from 25 to 45 rather in favor of English women ! * The operation 
of this law of compensation is everywhere traceable throughout 
mortality observations; indeed it pervades all nature. The 
astronomer recognizes its influence in the remotest regions of 
space : the philosopher finds it ever present with his enquiries ; 
reconciling and harmonising the results. The moralist trusts to 
it when other hopes fail him. The phrenologist knows its influ- 
ence in the nicely balanced operations of the human will, and the 
subjugation of the passions, while the divine derives aid and 
consolation from it, and traces it to the sacred origin from which 
it first sprang. 

We must now proceed to notice, more in detail, the data upon 
which the several Life Tables we have already, or shall hereafter 
have occasion, to refer to, have been based ; also the sources from 
which such data have been obtained. We may best accomplish 
this purpose by the following tabulated statement, which, in 
addition to indicating the materials employed, furnishes the names 
of the observers and compilers of the several Tables, also the date 
of observation, and, where necessary, of publication also. We 
have also adhered to chronological order as much as possible. 
Ulpian and Graunt are excluded from this Table for reasons 
already stated. 

1. A Record of the Births and Burials of the City of Breslau, in Silesia, from 

1687 to 1691.— Dr. Newmann, Dr Halley.— First Life Table. 

2. The same materials, re-arranged by Thomas Simpson, about 1742. 

3. The Mortality Bills of London, from 1728 to 1737.— Thomas Simpson and 

Dodson. 

4. The same materials for 1759 to 1768.— Dr. Price. 

5. Lists of the Tontine Schemes in France, and the Necrologies of Religious 

Houses. — Dr. Parcieux, 1746. 

6. The Register of the Assignable Annuities in Holland for 125 years before 

1748 — William Kersseboom. 

7. The Mortality of Northampton for forty-six years prior to 1780. — Dr. 

Price, Northampton Table. 

8. The Mortality of Chester for ten years, from 1772 to 1781.— Dr. Haygarth 

— Dr. Price. 

9. Seven Enumerations of the entire Population of Sweden, from 1755 to 

1776.— Dr. Wargentin— Dr. Price.— First " National " Life Table. 

10. The recorded deaths in Stockholm for nine years — 1755 to 1763. — Dr. 

Price. 

11. The Mortality of Norwich for thirty years prior to 1769. — Dr. Price. 

12. The Mortality of Holycross, Salop, for thirty years prior to 1780. — Rev. 

Mr. Gorsuch — Dr. Price. 

13. The Mortality of Warrington for nine years. — Dr. Aikin, Dr. Price, 1781 

14. The Mortality of Vienna, Berlin, and Branderiburgh, for long periods 

before 1766.— Susmilch, Dr. Price. 

* Vide Fifth Eeport of Registrar-General. 



DATA ON WHICH THE LIFE TABLES ARE BASED. 171 

15. Several Enumerations of the Canton de Vaud, Switzerland. — Muret, Dr. 

Price. 

16. The Mortality of Carlisle for eight years prior to 1787. — Dr. Heysham, 

Mr. Joshua Milne — Carlisle Table. 

17. The Mortality experienced by the Equitable Society — first by Griffith 

Davies, and subsequently revised by Mr. Morgan, 1834. 

18. The Mortality experienced by the Amicable Society for about seventy 

years prior to 1831. — Mr. Galloway. 

19. The Recorded Mortality of Government Annuitants, and Tontine Nominees 

in England and Ireland. — Finlaison, Government Table, 1829. 

20. The Recorded Experience of seventeen Life Offices, embracing assured 

lives to the number of 83,905. Committee of Actuaries — Jenkins Jones 
Experience Table. 

21. The English Life Table (No. 1) deduced from the numbers of living at 

different ages at the Census of 1841, and the deaths of the corresponding 
ages in the same year. — Dr. Farr. 

22. The English Life Table (No. 2) based on the Census of 1841, but the 

observations on deaths extending over a period of seven years ; viz., 
from 1838 to 1844.— Dr. Farr. 

23. The Experience of the Economic Life Office, based upon 9,335 lives. — 

Downes, 1857. 

24. The Experience of the Mutual Life Insurance Company of New- York 

over a period of fifteen years. — Sheppard Homans. 

25. The Experience of the Clerical, Medical, and General Life Office over a 

period of twenty-four and a half years. 

26. The Experience of the Eagle Life Office over a period of forty-four years, 

embracing 7,419 lives. — Charles Jellico. 

27. The Experience of the Scottish Amicable Life Office extending over a 

period of thirty-four years, and comprising 10,255 lives. — William 
Spens, 1861. 

28. The English Life Table (No. 3), "from the returns of two Censuses [1841 

and 1851], and 6,470,720 deaths registered in seventeen years." — Dr. Farr, 
1864. 

29. The Experience of the Royal Insurance Company over a period of twenty 

years. — Percy M. Dove, 1865. 

We have chiefly confined this list to English compilers, or to 
such Tables as are specially alluded to in various parts of this 
work. We have certainly included all the observations from 
which anything like correct mortality Tables of English life could 
be drawn. De Moivre, indeed, constructed a Table from the 
mortality of Breslau, which led to the hypothesis that of 86 
persons born, one dies every year, until all are extinct. The 
Northampton Table, to some extent, confirmed this ; but all 
subsequent Tables have shown different results. In addition to 
Deparcieux's French Table, two others have been prepared in 
that country, by M. Duvillard and M. Demonferrands, which 
will be noticed as we proceed. Up to a recent period no Life 
Table had been constructed for Prussia or Austria, although the 
data exist. The Census of Prussia is taken every three years, 
but in such a manner as to present difficulties in constructing a 
proper Table. The same with Austria. Registers of deaths are 
kept by the clergy of the Russian empire, but no Life Table has 
been formed. In the United States of America the Census is 
taken regularly every ten years, and the ages are properly 



172 



COMPARATIVE LIFE TABLE. 



distinguished, but abstracts only have been published for New 
York, Philadelphia, Boston, and some of the more advanced 
towns, " where property has accumulated and life is watched 
over with more care or facility than in the back settlements — - 
scantily peopled with a fluctuating population."* 

Before proceeding to notice more in detail the principal Tables 
referred to in the foregoing list, it may be well to give, in a tabular 
form, a comparison of their results, as shown in the " expectation 
of life " they severally give, at the ages placed in the margin of 
the Table. This course will facilitate reference. Here is the 
Table :— 





Northamp- 
ton. 


Carlisle. 


Equitable 
Society 


Government 
Annuitants 
Mixed Male 


Experience 

of 
Seventeen 


Dr. Farr's 

English. 
Life Table 


Deparcieux 
French 














Experience. 


ami Female. 


Offices. 


No. 2. 


Table. 




Age. 


Yrs. 


Ms. 


Yrs. 


Ms. 


Yrs. 


Ms. 


Yrs. Ms. 


Yrs. 


Ms. 


Yrs. Ms. 


Yrs. 


Ms. 


Age. 


10 


39 


9 


48 


10 


48 


10 





48 


4 


47 6 


46 


10 


10 


15 


36 


6 


45 


— 


44 


10 





45 


— 


43 5 


43 


6 


15 


20 


33 


5 


41 


6 


41 


8 


41 2 


41. 


6 


40 — 


40 


3 


20 


25 


30 


10 


37 


10 


38 


1 


88 4 


37 


11 


36 8 


37 


2 


25 


30 


28 


3 


34 


4 


34 


4 


35 5 


34 


5 


33 2 


34 


1 


30 


35 


25 


8 


31 


— 


30 


11 


32 3 


30 


11 


29 10 


30 


11 


35 


40 


23 


1 


27 


7 


27 


5 


29 1 


27 


3 


26 6 


27 


6 


40 


45 


20 


6 


24 


6 


23 


11 


25 10 


23 


9 


23 2 


23 


11 


45 


50 


18 


— 


2t 


1 


20 


4 


22 4 


20 


2 


19 11 


20 


5 


50 


55 


15 


7 


17 


7 


17 


— 


19 — 


16 


11 


16 8 


17 


3 


55 


60 


13 


2 


14 


4 


13 


11 


15 11 


13 


10 


13 7 


14 


3 


60 


65 


10 


11 


11 


9 


19 


4 


■ — — 


11 


— 


10 11 


11 


3 


65 


70 


8 


7 


9 


2 


9 


11 


— — 


8 


7 


8 7 


8 


8 


70 


75 


6 


6 


7 


— 


7 


6 


— — 


6 


6 


6 7 


6 


6 


75 


80 


4 


9 


5 


6 


5 


5 


— — 


4 


10 


5 — 


4 


8 


80 


85 


3 


4 


4 


1 


3 


9 


— — 


3 


4 


3 9 


— 


— 


85 



Speaking of the results generally, it will be remarked, that as 
the ages advance the expectancy more nearly corresponds : 
reminding us of the truthfulness of a remark of Dr. Southwood 
Smith, already quoted. There is, however, one age early in the 
Table — age 20 — which presents a uniformity of result equalled 
at scarcely any other age. Throughout the whole Table — look- 



ing^ 



as we shall have to do at the varied circumstances under 



which these results were obtained — the uniformity must strike the 
reader as little short of astounding : and he need not be again 
reminded by us that something more than chance must regulate 
human existence. 



NORTHAMPTON TABLE. 



The first Mortality Table known to have been used for the 
purpose of determining the rate of premium to be paid for Life 
Assurance is that known as Dr. Price's Northampton Table, — the 



* Dr. Farr. Fifth Annual Keport of Registrar-General. 



FIRST NATIONAL LIFE TABLE. 173 

occasion, as we have already seen, being the establishment of the 
Equitable Office in 1762. The adoption of this Table by the pro- 
moters of the Equitable Society does not appear to have been 
altogether at the instance of Dr. Price himself, for we are told 
by Dr. Fan* that "he recommended in the first instance his 
Chester Table, which is less erroneous than the Northampton 
Table, but the Directors of the Equitable judged it less safe." It 
may be assumed, therefore, that the Chester Table showed a 
more favorable mortality, and therefore indicated a less rate of 
premium. Dr. Price also constructed a correct Life Table from 
the population and deaths in Sweden, " which," says Dr. Farr, 
" was the first National Life Table ever made, and redounds 
much more to Dr. Price's fame than the Northampton Table." 
Besides, it was constructed later than the Northampton Table, 
and most likely later than the Chester Table ; and therefore had 
the advantage of increased experience. We have already ex- 
plained the cause which led to the principal error in the North- 
ampton Table ; and it is one which would not be likely to affect 
his other Tables. The Swedish Table, moreover, appears to have 
been constructed by a comparison of the deaths with the numbers 
and ages of the entire population, and we have already quoted 
the opinion of Dr. Price and others in support of this method of 
construction. 

On turning to the fourth edition of Dr. Price's work on Rever- 
sionary Payments and Annuities, we find him remarking, in the 
preface, " With respect to Tables, in particular, deduced from 
the Swedish observations, I cannot hesitate to pronounce that 
they exceed in correctness everything of this kind vihich has 
hitherto been offered to the public ; and that nothing is wanting 
to make our knowledge in this instance complete but similar 
observations in other kingdoms. By these Tables, I have been 
enabled to state minutely the different rates of mortality of all 
ages among males and females, and to form Tables of the value 
of single and joint lives for each sex, as well as for both sexes 
collectively." This was written, too, after he had remedied some 
of the more prominent defects in the Northampton Table. 

In the seventh edition of the same work — published by Mr. 
Morgan after the death of Dr. Price — we find the following 
note, reprinted from some former edition, in which Dr. Price, 
speaking of the Table he had deduced from the mortality of 
Holy-Cross, near Shrewsbury, says, "In November, 1781, Mr. 
Gorsuch was so kind as to favor me with a continuation of his 
observations to 1780, which makes them complete for thirty 
years. An abstract of them and a Table of the decrements of 
life deduced from them, which I reckon one of the most correct 
that has ever been published, will be found in the collection of 
Tables in this volume." Thereby, as we think, further showing 
his own distrust in the Northampton Table. 

Nearly all subsequent writers and compilers have referred tc 



174 MISCHIEF DONE BY THE NORTHAMPTON TABLE. 

the errors of the Northampton Table. Professor de Morgan says 
of the Table, " to a certain extent the young are made to pay for 
the old — that is to say, the person who assures early in life — the 
more prudent of the two — is made to pay a part of the premium 
of one who does not begin till he is old." Dr. Farr speaks in 
stronger terms : " Great injustice has been done by the use of 
this Northampton Table, which in mutual Offices makes one 
member pay 40, 30, 25, 20, 10 per cent, more than the premium 
which is required to secure a policy of the same value, and distri- 
butes the surplus thus acquired unequally. The old Offices which 
have used the Northampton Table have a great difficulty in set- 
ting themselves right. By its use (he continues) the proprietary 
Offices have exacted enormous and unequal premiums from the 
portions of the community who happened to be ill-versed and 
ill-instructed in the intricate science of Life Assurance." In 1827 
a Committee of the House of Commons was appointed to investi- 
gate the accuracy or otherwise of this Table, more particularly, 
we believe, in relation to the Annuity question before referred 
to, and the loss which was entailed on the nation by the con- 
tinued use of this Table; and they thus reported: "The evidence 
appears to your Committee to be strong and decisive in favor of 
the use of Tables which give an expectation of life higher than the 
Northampton. In truth there is not even a prima facie case 
in its favor." 

Dr. Farr again and again recurs to the defects of this Table : — 

" A false Life Table can be defended by the same arguments as a depre- 
ciated currency ; and the substitution of a correct Table causes the same kind 
of disturbance in the value of the shares of members, as the re-coinage of 
clipped money, or a return from a depreciated paper to a metallic currency, 
introduces into the value of commodities and securities. The Northampton 
Table has still silent adherents, but few open defenders : and some of the old 
Offices have, greatly to their credit, since the error in that Table has been 
placed beyond doubt, abandoned its use." 

Mr. Neison, in the preface to the third edition of his valuable 
work, Contributions to Vital Statistics, says : — 

" It is very curious, if not a mortifying circumstance, to discover, at this 
advanced stage of our progress, that the gigantic monied interests of our 
greatest Companies have long relied almost exclusively on a Table which has 
been falsely constructed, and which in fact does not represent the rate of Mor- 
tality, even in the locality from which the data have been collected, nor, as 
will hereafter appear, the rate of Mortality in the country generally, nor 
among the assured portion of the community." 

The Legacy Duties in 36 Geo. III., c. 52, were estimated from 
this Table. 

The following Table furnishes a comparison of the Mortality 
expected under three other Tables than the Northampton. Out 
of 1,000 persons born at the same time, there will be living at 
each period of 5 years the numbers named in each column : — 



COMPARATIVE MORTALITY TABLES THE CARLISLE TABLE. 1 



Age. 


Breslau. 


Northamptoz. 


Carlisle. 


Sweden. 


Dr. Halley. 


Dr. Price. 


Dr. Heysham. 


Dr. Wargentin. 





1000 


1000 


1000 


1000 


5 


563 


536 


680 


656 


10 


508 


487 


646 


611 


15 


483 


465 


630 


590 


20 


461 


441 


609 


570 


25 


436 


409 


588 


546 


30 


409 


376 


564 


549 


35 


377 


344 


536 


488 


40 


342 


312 


507 


459 


45 


307 


279 


473 


422 


50 


267 


245 


440 


365 


55 


224 


210 


407 


340 


60 


186 


175 


364 


293 


65 


147 


140 


302 


233 



CARLISLE TABLE. 



Professor de Morgan has pronounced this to be " the best ex- 
isting Table of healthy life in England." This, however, was 
before Dr. Farr had constructed the English Life Tables. Dr. 
Milne, its compiler, was of opinion that, although it had been 
constructed from the mortality of two parishes only, the results it 
exhibited would probably vary very little " from the general law 
that obtains throughout the kingdom, taking towns and country 
together, if we except the children under five years of age, or at 
most under ten"* And this was certainly a very necessary ex- 
ception, as may be seen by referring back to the Table. In other 
respects it has undoubtedly been the best guide to " healthy life " 
in England, from the date of its publication at least up to the 
completion of Dr. Farr's Tables. It gave the expectation of life 
for males of 30, in Carlisle, at 34£ years. The average duration 
throughout England at the same age is 33f years ; and in Sweden 
and Finland 32f. There is no doubt that at the time this Table 
was first constructed, it did show results too favorable for the 
whole country at all ages ; but the health of the country was at 
that time rapidly improving, and therefore it may be said that 
the ultimate accuracy of the Table arose rather from accident 
than design. This, however, is not material ; the fact is patent, 
that all properly conducted Offices, based upon this Table, have 
met their engagements, and for the most part had very large sur- 
pluses to spare. 

Notwithstanding its generally admitted accuracy, this Table 
has, however, met with some very violent assailants. Mr. Hig- 
ham, the Actuary of the Royal Exchange Office, says, "The 
Carlisle Table, through its whole extent, is of no authority, and 
at the extreme ages is useless and absurd. The numbers (he con- 
tinues) on which it is founded, are so small, that it owes its popu- 
larity entirely to the accident that it happens to agree pretty 

* Milne on Annuities, p. 451. 



176 



NORTHAMPTON AND CARLISLE TABLES COMPARED. 



nearly with other observations."* The chief objection other 
writers have urged against it is, its " faulty graduation ;" and it 
must be admitted that there are grounds for this complaint. 
This is apparent not only in the younger ages, before referred 
to, but also in the advanced ages : thus at age 91 the expectation 
is 3 years and 3 months ; at 95 it is 3 years and 7 months. Dr. 
Milne, however, says, " it is not to be understood from hence that 
a man at the age of 95 is likely to live longer than the same indi- 
vidual was at 91. But that out of the persons who attain to 91, 
those only survive to 95, in whom all the powers of life are so 
exactly balanced, that they are calculated to live several years 
longer than the common average of those who survive 91 ; and it 
they could be selected from the rest at that earlier age, the ex- 
pectation of life for those select lives would certainly be higher 
at 91 than at 95."f 

The difference between the " Expectation " under the North- 
ampton and Carlisle Tables is very remarkable ; and it may be 
seen to its fullest extent by comparing the numbers out of 1,000 
children born the same year, which each Table expects to be liv- 
ing at the end of each five years through life : — 



Out of 1,000 born. By Northampton Table. 
At end of 5 years 536 


By Carlisle Table. 
... 680 


Difference 
. .. 144 


10 ( 


487 


... 646 


. . . 159 


15 ' 


465 


... 630 


... 165 


20 ' 


441 

409 


... 609 


... 168 


25 ' 


... 588 


. . . 179 


30 ' 


376 . .. 


... 564 


. . . 188 


35 ' 


1 344 

312 


. . . 536 


. . . 192 


40 ' 


. . . 508 


. . . 198 


45 ' 


279 


... 473 


. . . 194 


50 « 


245 


. . . 440 


. . . 195 


55 ' 


210 


. . . 407 


. . . 197 


60 ' 


175 


. . . 364 


. . . 189 


65 ' 


140 


. . . 302 


. . . 162 


70 ' 


106 


. . . 240 


. . . 134 


75 ' 


71 


. . . 168 


97 


80 ' 


40 


. . . 95 


... 55 



The difference amounts on an average to 33 per cent., or one- 
third, so that if a given sum were made payable to each of the 
1,000 lives included in the example, one-third less money would be 
required for the purpose under one Table than the other. This 
not only accounts for the difference between the expectation (and 
therefore the difference in the rates of premium), but also for the 
enormous funds realized by some of the old Offices using the 
Northampton Table. The best age — that is the age which shows 
the greatest expectation of life in the Carlisle Table is seven 
years. In the Northampton Table it is at eight years. 

The Carlisle Table gives the expectation at birth at 38f (38*72) 



* Assurance Magazine, vol. 1, p. 



t Milne on Annuities, p. 554. 



THE EQUITABLE TABLE. 1*1*1 

years. Therefore, Dr. Milne observed, in a stationary population 
subject to the same law of mortality, and not affected by migra- 
tion, one person would die annually out of 38-72 (38f), or one 
hundred out of 3,872. 

The Life Offices in the United States are almost without an ex- 
ception, we believe, based upon the Carlisle 4 per cent. Table, 
with an addition of about 33^- per cent. Therefore, so far as the 
net premiums go, the Offices nearly all have the same basis. 

Mr. Thomas Rowe Edmonds, the Actuary of the Legal and 
General Office, whose authority on Mortality Tables is entitled 
to weight, has publicly stated his belief that this Table is 20 per 
cent, too favorable for lives that have been long assured, but that 
it fairly represents the mortality amongst lives assured less than 
ten years. He therefore gives a wider range to the benefit of se- 
lection than many Actuaries. We are not aware that this view 
is supported by others of the profession. 

EQUITABLE SOCIETY EXPEKIENCE TABLE. 

The chief interest in this Table arises from the fact of its being 
the first Mortality Table constructed upon the records of assured 
life, as distinguished from the lives of annuitants, Tontine, or 
otherwise. This Table was first prepared by Mr. Griffith Davies, 
from the decrements of life amongst the members of the Equita- 
ble Society. Mr. Morgan, the actuary of that Society, after- 
wards re-computed it, and adopted a different system of gradua- 
tion to that adopted by Mr. Davies, after which it was found to 
differ in no case more than about eleven months from the Carlisle 
Table, while in many ages the results were identical. Vide 
Example, p. 172. The example thus set by the Equitable was 
soon followed by the Amicable, and since by the Scottish Widows' 
Mind, the Eagle, the Standard, and one or two other Offices ; 
although the results, with the exception of the Amicable and 
Eagle, have not, we believe, been extended into Life Tables. The 
experience of the Equitable Society was found to be much more 
favorable than that of the Amicable. Professor de Morgan 
accounts for the circumstance by stating that the former was 
much more careful in the selection of its lives than the latter 
during the early period of its existence, adding, however, " The 
later years of the Amicable Society do not exhibit any very 
decided difference of the sort." 

The Mortality experience by the Economic Society — one among 
the best conducted Life Offices in this country — has recently been 
published, and shows results more favorable to assured life than 
either of these Tables. 

Mr. Edmonds has remarked, with respect to these Tables, 

" The observations of the Equitable show that there is apparently some 
connection between the mortality of assured lives and the mortality of the 
general population, for the Table deduced from the Equitable and Amicable 



178 ANNUITANTS VERSUS ASSURERS. 

experience combined, including the five years of membership, represents very 
nearly the observed mortality of the total male population of England in 
seven years, from 1838 to 1844, inclusive." 



GOVERNMENT TABLES. 

These Tables were based upon the recorded ages and deaths of 
22,000 Government annuitants and Tontine nominees in England 
and Ireland ; and Mr. Finlaison, their compiler, was so confident 
of their accuracy that he expressed his belief, before a Committee 
of the House of Commons, that they would supersede all other 
Tables then in use. He said they " had been eight years in pre- 
paration with all the means of perfecting them which the Govern- 
ment could supply, and to which no private individual had 
access." This prediction, however, has not been realized. The 
fault of these tables rests almost entirely on their being based upon 
too limited a number of observations. 

Mr. Finlaison was the first compiler who deduced from English 
data separate values for male and female lives. At the age of 20 
he found the female expectation of life no less than 5^ years 
greater than the male expectation. In the Experience Tables, 
calculated a few years afterwards, the difference was four years 
the other way/ Both these Tables were based upon experience. 
But the Government Tables gave the experience of annuitants — 
the Experience Table the experience of assurers ! Here, at least, 
is "food for reflection." Dr. Farr attributes these results to 
errors arising from the limited number of observations taken in 
each case ; adding, " For it is inconceivable that female lives 
should be so much longer or shorter than the lives of males, as 
these returns indicate." He also arrives at the conclusion, from 
these facts, that " selection, under the existing tests, is more effec- 
tive in the case of females than in the case of males ;" but that 
it is not safe at present to insure females at lower rates than males." 

Mr. Sang, a Scotch writer and actuary, drew attention to the 
fact that the male lives selected from the Government annuitants 
were much worse than the average male population of the king- 
dom, particularly at ages under 25. Looking to the cause of this, 
he says, it " may, no doubt, be attributed to the want of regular 
labor, and to the pampered style of living of the richer classes." 
* The constitutional effect of early irregularities, (he continues), 
seems to influence the remainder of life ; for after age 30, when the 
mode of living may be supposed to have become sobered, the line 
still continues, though at less distance, below that for the average 
population. Between ages twenty and thirty, a great improve- 
ment may be remarked. The expectation of life by the females 
of the wealthier classes is, on the other hand, decidedly, though 
not much, greater than by the mass of the female population : a 
circumstance that seems to indicate that women enjoy prosperity 
much more moderately than men do, and that they use the advan- 



THE EXPEltlENCE TABLE. 179 

tages of their situation in a proper way for the improvement of 
their health, and consequent increase of their happiness.'''' Taking 
both sexes into account, Mr. Sang considers, " that one may feel 
warranted in stating that if health and longevity be an index of 
happiness, a greater share of that so much desired good is 
enjoyed by the working population (the middle class generally) 
than by those who have been more favored with the smiles of 
fortune." 

Mr. Finlaison, during his investigations, observed a very extra- 
ordinary prolongation of human life — " so great that the duration 
of existence now, as compared with what it was a century ago, 
is as 4 to 3 in round numbers ;" — thus fully confirming the state- 
ments of Mr. Griffith Davies and others in the same direction. 



This Table was based on the recorded experience of seventeen 
Life Offices, including the Equitable and the Amicable, the Alli- 
ance, British Commercial, Crown, Economic, Guardian, Impe- 
rial Law Life, London Life, Norwich Union, Promoter, Scottish 
Widows' Fund, Sun, Universal, and the University Offices. The 
total number of lives observed upon was 83,905. The data 
was collected under the superintendence of a Committee of Actua- 
ries, which availed itself of the most extensive and special ex- 
perience that could be obtained to determine the law of mortality 
which prevails among assured lives. The results, however, were 
compiled and published by Mr. Jenkin Jones. The Table is beau- 
tifully graduated — it had the advantage also of both town and 
country experience — and but for the publication of Dr. Farr's 
Tables, which have had the advantage of far more extended 
data, would probably have been the most popular Table of the 
day. It may be noted as strange, that these Tables have never 
been made public ; a small number only having been printed 
for private circulation. 

Dr. Farr urges an objection to the use of this Table for the 
purpose of determining the premiums, or valuing the assets and 
liabilities of Assurance Offices, on the ground that as the average 
term over which its observations extend is only 8-§- years, it con- 
siderably under-states the mortality, which it is probable will 
•prevail in Insurance Societies when they have attained maturity ; 
also adding that the mortality at the advanced and most impor- 
tant ages, by the Carlisle Table, is lower than that which has 
already been experienced among assured lives, and is indicated 
by this Table. He adds — 

" In the course of a century, or of half a century, from the observations on 
a great number of assured lives, a Table can be constructed, which will be 
a most valuable contribution to statistical science, and enable competent men 
to decide whether a Table of the mortality prevailing among the insured 
lives during the 19th century is more likely to express the mortality of the 



180 



THE EXPERIENCE TABLE. 



persons who insure their lives in the 20th century, than a Life Table deduced 
from the living, and from the deaths in the population of that day." 

In the computation of this Table several curious and unex- 
pected results were elicited, First, it showed that the mortality 
from "town" life, taking all ages together, was more favorable 
than the mortality from " country " life. Secondly, that the 
mortality amongst assured females was greater than amongst 
assured males ; and thirdly, that the mortality amongst Irish 
lives was greater than amongst either town or country assur- 
ances in England. The following Table, furnished by Mr. 
Brown, shows the actual differences in the mean duration of each 
class of lives : — 





Males. 


Females. 


Town. 


Country. 


Irish. 


Northamp- 
ton Table. 


Age. 


Years. Mns. 


Years. 


Mns. 


Years. 


Mns. 


Years. Mns. 


Years. 


Mns. 


Years. Mns. 


20 


39 10 


35 


10 


41 


2 


40 4 


34 


11 


33 5 


30 


33 2 


31 


9 


34 


10 


34 2 


29 


8 


28 3 


40 


26 1 


26 


4 


27 


6 


27 4 


23 


4 


23 1 


50 


19 5 


20 


— 


20 


7 


20 6 


17 


9 


17 11 


60 


13 5 


13 


9 


14 


3 


14 — 


12 


8 


13 2 


70 


8 4 


7 


11 


8 


7 


8 6 


7 


11 


8 7 



The figures relating to the Irish, lives embrace both male and 
female, and they show a less duration of life than amongst as- 
sured females in England. Even the Irish, lives exhibit a mor- 
tality slightly more favorable than that of the Northampton 
Table. It is very difficult to account for the difference in favor 
of town over country life. The larger number of assurers resid- 
ing in towns, it is probable that the number of country lives 
observed upon might not have been sufficient to secure correct 
results. The difference is but very slight, still it is on the side 
least expected. That female assured life is less favorable than 
male assured life has been ascertained from several sources;* 
this Table gives the following results : — At age 20, male expecta- 
tion, 39 years and 9 months (39'8) ; female expectation, 35 years 
and 10 months (35*9); being, as we have already shown, almost 
exactly the reverse of the Government Tables. 

According to the English Table, the expectation at 20 is 39 
years and 11 months for males, and 40 years and 10 months for 
females: difference 11 months in favor of females. 

Mr. Finlaison, in his evidence before the Select Committee on 
Assurance Associations, said, in reference to this Table, " I my- 
self should count for six ; I am assured in different Offices six 
times. Then, if policies are counted, and not individual lives, 
which is the case in the Actuaries' (Experience) Table, while I 
live I count for s/ix, and when I die I shall count for six deaths." 

* Samuel Brown. 



THE ENGLISH LIFE TABLE. 131 

Adding U A Table so constructed cannot be depended upon for 
Life Insurance purposes "* This statement, from so high an 
authority, was calculated to arouse considerable attention in the 
Assurance world, and it did so. We happen to know that Mr. 
Downes, the Actuary of the Economic Office, in his recent inves- 
tigations into the mortality experienced by the Society, directed 
particular attention to this point ; and although we are not at 
liberty to state the plan on which he proceeded, and can only 
plead our desire for the furtherance of scientific truth, for here 
referring to the matter at all, we may state that the result of Mr. 
Downes' investigations shows Mr. Finlaison's objections to have 
little or no foundation whatever. 



The English Life Table, or as it would be better called, the 
"National" Life Table, was founded originally upon the census 
returns of 1841, and (in the first instance) the deaths of that year. 
Its compiler, Dr. Farr, is, or ought to be, well known to every 
person interested, however remotely, in the progress of Life 
Assurance or sanitary reform. The able "letters," or rather 
treatises, which from time to time emanate from his pen, grace 
and enliven the otherwise tame and cumbrous reports of the 
Registrar-General. Perhaps there is no man living who has done 
more to extend the blessings we all most prize — namely, health 
and long life. The unmistakable clearness of his facts, and the 
cogency of his reasoning, have forced conviction throughout the 
length and breadth of the land, and the result is seen in the estab- 
lishment of Boards of Health — the efficient drainage of towns, 
and supply of pure water — the prohibition of intramural burials, 
and the providing of public cemeteries — to say nothing of " peo- 
ple's" parks, and model lodging houses, which are also manifes- 
tations of the same spirit of improvement. Future generations 
will not fail to hold in veneration the memory of one whose 
almost individual labors — aided and promulgated by the public 
press — have produced such extended good. It would be no more 
than justice if the present generation made some more substan- 
tial acknowledgment for such service. 

Believing that nothing short of a Table, based upon the returns 
of the entire kingdom, would satisfy the increasing demands of 
Assurance Offices — extending as they are their operations to every 
town and hamlet in the kingdom, and becoming thereby affected 
by all the influences of occupation and locality — Dr. Farr, at 
enormous labor, placed such a Table at our command ; viz., the 
English Life Table No. 1, published in the same volume with the 
fifth report of the Registrar-General : the principal observations 
thereon being afterwards given with the sixth annual report. 

But after this labor had been incurred, Dr. Farr was led to be- 

* Vide Answer No. 701. 



182 THE ENGLISH LIFE TABLES N0S. I., II., AND III. COMPARED. 

lieve that the records of one yearns deaths might be too meagre 
to furnish results sufficiently unchallengeable for the purpose in 
view. He, therefore, recommenced his labors, and although ad- 
hering to the census report of 1841 as his basis of comparison, he 
took the deaths of three previous, and of three subsequent years — 
making with those of 1841 a period of seven years of observations 
— and from this extended data deduced a new series of results 
known as Life Table No. 2, published with the 12th annual re- 
port of the Registrar-General. 

Again, more recently, Dr. Farr has been at work on a still 
larger area of observations, and has (1864) produced the English 
Life Table, No. 3. While the No. 1 Table was based upon the 
recorded ages of 15,914,148 living persons, and No. 2 Table on 
2,436,648 deaths, No. 3 Table is deduced from the returns of the 
two censuses of 1841 and 1851, embracing some fifty millions of 
living, and from six millions, four hundred and seventy thousand, 
seven hundred and twenty deaths registered in seventeen years. 
Thus, this last Table, in Dr. Farr's own words, " is not deduced 
from the population or the deaths alone, but from the ratio the 
one bears to the other at different ages.'''' It is therefore as accu- 
rate as extended observations, profound research, and unwearied 
labor and consideration can make it. Nor will the interest in 
it be lessened from the fact that the elaboration of the above 
results have been calculated and printed by Scheutz's machine, 
purchased by the Government for the Registrar-General several 
years since. 

The difference between the several Tables is slight, but still 
sufficient to justify Dr. Farr in his belief that a more extended 
period than one year's deaths should be observed upon. The ob- 
servations were taken on the plan recommended by Professor de 
Morgan and Mr. Griffith Davies, and Dr. Farr has the proud satis- 
faction of knowing that he has produced a Life Table which most 
fully and completely represents the decrement and expectation of 
life in this kingdom at the present time, in the absence of extra- 
ordinary epidemics. 

Mr. E. J. Farren stated before the Select Committee on Assu- 
rance Associations (1853,) "for mixed lives I consider there are 
none equal to Mr. Farr's Tables." And again, " I consider he is 
the only man who has paid attention to the science of the subject 
for many years." 

The actual difference in decrement may be seen by the follow- 
ing example. The variation is confined chiefly to the middle 
ages of life — more particularly those from 35 to 50. 

Out of 1,000 males born at the same time there will be living 
at the commencement of each period of five years from birth the 
numbers stated opposite to the ages, and of these the numbers 
stated in the succeeding column in each case will die during the 
year :-— 



THE ENGLISH LIFE TABLES NOS. I., II., AND III. COMPARED. 183 





Table No. I. 


Table No. II. 


Table No. ILL 


To 1000 children 
born, the number 

of males living 

at each period of 

5 years. 


Males dying 
in the year 

following 
each 

Birthday. 


To 1000 children 

born, the number 

of males living 

at each period of 

5 years. 


Males dying 
in the year 

following 
each 

Birtbday. 


To 1000 children 
born, the number 

of males living 

at each period of 

5 years. 


Males dying 
in the year 

following 
each 

Birthday. 





512 


81 


513 


82 


511 


83 


5 


373 


56 


372 


5 


370 


5 


10 


355 


1 


355 


2 


353 


2 


15 


345 


2 


346 


2 


344 


2 


20 


333 


2 


335 


3 


333 


3 


25 


319 


2 


321 


3 


319 


3 


30 


304 


3 


307 


3 


304 


3 


35 


288 


3 


291 


3 


288 


3 


40 


271 


3 


275 


3 


272 


4 


45 


253 


3 


257 


4 


253 


4 


50 


233 


3 


237 


4 


233 


4 


55 


213 


4 


215 


5 


209 


5 


60 


188 


5 


189 


6 


182 


6 


65 


155 


7 


156 


7 


150 


7 


70 


118 


7 


118 


8 


114 


8 


75 


78 


7 


79 


8 


75 


7 


80 


43 


6 


44 


6 


41 


6 


85 


17 


3 


18 


4 


16 


3 


90 


4 


1 


5 


1 


4 


1 



On the whole, therefore, Table No. 3 shows results slightly less 
favorable to human life than No. 1 or No. 2. 

The difference is more apparent in noting the " expectation " 
under the respective Tables : 



Ages. 


Table No. I. 


Table No. II. 


Table No. m. 




Expectation. 


Expectation. 


Expectation. 










Males. 


Females. 




Years. Months. 


Tears. Months. 


Years. Months. 


Years. 


Months. 


10 


47 5 


47 6 


47 — 


47 


8 


15 


43 8 


43 5 


43 2 


43 


11 


20 


40 4 


40 — 


39 6 


40 


3 


25 


37 — 


36 8 


36 2 


37 


— 


30 


33 8 


33 2 


32 9 


33 


10 


35 


30 5 


29 10 


29 5 


30 


7 


40 


27 2 


26 6 


26 — 


27 


4 


45 


23 10 


23 2 


22 9 


24 


1 


50 


20 7 


19 11 


19 6 


20 


9 


55 


17 2 


16 8 


16 5 


17 


5 


60 


14 — 


13 7 


13 6 


14 


4 


65 


11 2 


10 11 


10 10 


11 


6 


70 


8 9 


8 7 


8 5 


9 


— 


75 


6 9 


6 7 


6 6 


7 


— 


80 


5 1 


5 — 


5 — 


5 


3 


85 


3 9 


3 9 


3 9 


4 


— 



Dr. Farr found the annual mortality of the English population 
during five of the years under observation, viz., from 1838 to 1842, 
to be 24- (2-209) per cent., or nearly one in 45. During the same 



184 



DEPAKCIEUx's TABLE. 



period the mortality in France was 2*397, or one death in 42 liv- 
ing. In Prussia, during the years 1838-41, 2*658, or one in 38 
living. In Austria 2*995, or one in 33 living; and in Russia 3*590, 
or one in 28 of the living* He further found that of 100,000 
children born alive in England, 51,274 are boys, and 48,726 girls. 
Of these 33,060 males, and 32,464 females, attain the age of 21, 
and 11,824 males, and 12,708 females, live to 70.f 

The English Life Table shows that half a generation of men of 
all ages passes away in thirty years, and that three in every four of 
their number die in half a century. Also that the " mean age" of 
the people is 32 years, and that the " mean time" they would live 
if the population were stationary is 32 years. 

DEPARCIETTX's (FRENCH) TABLE. 

We have appended to the Table of expectations at page 172, 
for the purposes of comparison, the results of Deparcieux's French 
Table. It will be observed that it gives an expectation greater 
than the Northampton Table at all except the extreme ages. On 
the other hand, it is below the Carlisle Table at all ages, and the 
same in respect to the Government Table. It corresponds very 
nearly with the Equitable Experience Table, and at ages above 20 
with the " Experience" Table; but it is at all the ages over 10, 
above the English Life Table. This result would be very remark- 
able, but for the fact that the Table was founded upon the deaths 
of French annuitants, monks, and nuns, and not upon the general 
population of France. Indeed, France has no National Life Table, 
nor has she ever published the data upon which one could be 
founded. Duvillard^s Table, which is chiefly used by the French 
Insurance Offices, was founded on 100,542 deaths at different ages 
in different parts of France, amongst a population of 2,290,672. 
It gives the mean duration of life in France at 28 years and 9 
months (28*76).J 

It was Deparcieux who first demonstrated, what had previously 
to his investigations only been surmised or expected, namely, that 
the expectation of female life was greater at all ages than the ex- 
pectation of male life. We have not his Tables at hand, and 
therefore cannot give any example of his results. Kersseboom, 
if we remember rightly, observed the same ; but (as we have 
already stated) Mr. Finlaison was the first to give separate values 
for male and female life on English data. The following is an 
abstract of his Tables : — 



2§ 6 


Male Expectation. 


Female Expectation. 


Difference. 




38 years and 5 months. 44 years. 




5 years and 7 months 


25 


35 " 


11 


' 40 years 


and 10 months. 4" " 


11 


" 


30 


33 " 


2 


37 " 


7 


4 « 


5 


(i 


35 


30 " 


2 


34 " 


4 


4 " 


2 


ct 


40 


27 " 


— ' 


31 " 


1 


4 " 


1 


'■ 


45 


23 " 


9 


27 " 


10 


4 « 


1 


(t 


50 


20 " 


4 


24 " 


4 


4 « 


— 


.( 


55 


17 " 


2 


20 " 


10 


3 '" 


8 


« 


60 


14 " 


5 


17 " 


4 


2 " 


11 


<< 




* Sixth Report 




t Ibid. 




X Dr. Farr 


—Fifth "Report. 



DECREMENT OF MALE AND FEMALE LIFE. 



185 



The difference in favor of " female expectation" is here seen to 
be the greatest at the age of 20. At 25 it becomes nearly 12 
months less, by 30 it has decreased still further by 6 months. It 
remains steady at about 4 years from 35 to 50, and then gradually 
declines. 

It must be remembered, in looking at the above comparison, 
that the lives observed upon were not selected from the general 
population, but were those of annuitants. We have also seen 
that the male expectation under these Tables was, from causes 
already referred to, below that of the general population of the 
kingdom. On the other hand the female expectation was above 
that of the general population or of any other Life Table. Indeed, 
under the " Experience" Table, based upon assured life, results 
almost the very opposite of the above were produced, so that we 
must look elsewhere for more reliable data. 

The English Life Table (No. 3) which far more nearly than 
any other existing Table, represents the present mortality of the 
kingdom, gives the following results at ages corresponding to the 
above : — 



Age. 


Male Expectation. 


Female Expectation. 


Difference. 




20 


39 


years 


6 months. 


40 


^ears 


3 months. 


— years 9 months. 


25 


36 


" 


2 


tt 


37 


" 


— " 


— ' 


< 10 


" 


30 


32 


tt 


9 


a 


33 


" 


10 " 


1 < 


1 


" 


35 


29 


" 


5 


tt 


30 


" 


7 " 


1 < 


2 


" 


40 


26 


<< 


— 


a 


27 


" 


4 " 


1 ' 


4 


" 


45 


22 


ct 


9 


it 


24 


" 


1 « 


1 ' 


4 


" 


50 


19 


a 


6 


tt 


20 


" 


9 « 


1 ' 


3 


" 


55 


16 


tt 


5 


tt 


17 


tt 


5 " 


1 ' 


' — 


a 


60 


13 


it 


6 


" 


14 


tt 


4 " 


— ' 


' 10 


tt 


65 


10 


tt 


10 


tt 


11 


it 


6 " 


— 


8 


tt 


70 


8 


" 


5 


tt 


9 


it 


— " 


— < 


7 


tt 


75 


6 


" 


6 


tt 


7 


tt 


— " 


— « 


6 


tt 


80 


5 


tt 


— 


tt 


5 


tt 


3 " 


— ' 


3 


tt 



We have brought the comparison down to four later ages, 
during which female life still retains the advantage, and it does 
so through life. At 95 the difference is only one month. These 
results are very different from the former ones, although they 
confirm the point under notice ; and it is fortunate for assurance 
offices that this more correct data has been produced. The causes 
which contribute to render female better than male life have been 
reviewed in our chapter on population. At birth the English Life 
gives females an advantage of two years : the expectation for 
males being 40 years and 2 months ; for females 42 years and 2 
months ; on an average of the whole period of life the difference 
is only 1 year and 2 months. 

A writer in Tait's Magazine, for 1848, gave, in illustration of 
this point, the following Table of the decrement of male and 
female life at the several ages from birth. We do not know from 
what source the statistics are derived. 



186 



KERSSEBOOM S TABLE OP MORTALITY. 



End of 








End of 








Year. 


Male. 


Female. 


Difference. 


Year. 


Male. 


Female. 


Difference, 


1 


981 


981 





50 


561 


623 


62 


2 


963 


967 


4 


60 


440 


539 


99 


4 


937 


945 


8 


70 


288 


412 


124 


6 


919 


926 


7 


80 


125 


210 


85 


8 


906 


913 


7 


90 


11 


52 


41 


10 


896 


903 


7 


94 


1 


14 


13 


15 


872 


883 


11 


95 


— 


8 


8 


20 


837 


848 


11 


96 


— 


5 


5 


30 


732 


777 


45 


97 


— 


2 


2 


40 


644 


700 


56 


98 


— 


1 


1 



It is a curious feature counected with observations on _ZmA lives 
that the men appear to live longer than the women in the " rural" 
districts ; and the women longer than the men in the " civic" dis- 
tricts. Frenchmen live longer after 20 than the women, if the 
expectations of life in the two sexes be equally correct, or incor- 
rect, in M. D em onfer rand's Tables. In England the lives of fe- 
males exceed those of males by about a year — except at birth, 
when the difference is greater. In Surrey the females, from the 
age of one year and upwards, live little longer than the males; 
the difference is greater in the metropolis, where it amounts at 
some ages to two or three years. This may, perhaps, account for 
the differences in the expectations of life deduced from male and 
female annuitants. According to Mr. Finlaison's Tables, the lives 
of men are from five to six years shorter than those of women, a 
discrepancy which, in its extent, is entirely at variance with all 
other observations. If the majority of the annuitants before 1829 
were inhabitants of London, and more than a due proportion of 
the women lived in the country, such a discordant result would, 
however, bt, produced. — Vide Fifth Annual Report of the Regis- 
trar-General. 

Results equally unaccountable and perplexing have been de- 
duced from other Life Tables, more particularly those of Kersse- 
boom and Deparcieux. Dr. Milne, in his supplement to Dr. Hey- 
sham's observations on the mortality of Carlisle, says, in reference 
to these — " We have seen that fens and marshes increase the mor- 
tality considerably ; and Holland, where there is more of the 
effluvia of mud and stagnant water than in any other part of Eu- 
rope, was the residence of the annuitants, from the duration 
of whose lives (principally) M. Kersseboom constructed his 
Table of mortality ; yet there are very few places where the 
probabilities and expectations of life have been observed to be so 
great as that Table represents them." And, he continues, " the 
influence of great and populous towns in abridging life is also 
well established, yet the nuns of Paris, and the nominees in the 
Tontines, from which M. Deparcieux constructed his Tables, most 
of whom resided in that city, certainly lived considerably longer 
than the bulk of the people in France. If all other circumstances 
except soil and climate, with their fruit productions, were the 
same in both countries, the inhabitants of France might well be 



EXPERIENCE OF MUTUAL LIFE COMPANY OF NEW-YORK. 187 

expected to live longer than those of Sweden ; but M. Duvillard's 
Table of mortality, as well as all the other observations that have 
been made on any considerable part of France, show, when com- 
pared with the Swedish Tables, that the mean duration of life is 
longer in Sweden than in France. Hence, he says, it appears that 
the law of mortality depends more upon the circumstances and the 
habits of the people than upon the place of their residence."* 

EXPERIENCE OF MUTUAL LIFE COMPANY OF NEW-YORK. 

The labors of Mr. Sheppard Homans presented, we believe, the 
first known results of the duration of life in the United States of 
America. There had been much scientific speculation upon the 
subject, and the general impression was that the wear and tear of 
life on that side of the Atlantic was much greater than in the old 
countries on the European side, and that consequently the mor- 
tality would be greater. A few English Companies had issued 
policies on lives on that side ; but there was a decided prejudice 
against, or perhaps we should rather say fear of, the results of the 
business ; and the numbers assured and the duration of the poli- 
cies were not sufficient in these cases to afford a basis for observa- 
tion. It was, therefore, with no small degree of interest that the 
results of the investigations of Mr. Homans were received in this 
country. 

The observations were confined to the lives assured in the Mu- 
tual Life Company of New- York, of which Mr. Homans is the 
actuary. They extend over several thousands of lives, assured 
during a period of fifteen years. Comparison can therefore only 
be made with English assured life ; for at present there exists no 
general mortality table founded on the entire population of the 
United States, although we believe that Mr. Kennedy, of the 
United States Census office, is taking very elaborate observations, 
with a view to the preparation of such a Table. When we re- 
flect upon the vast area over which such observations must extend, 
and the constant fluctuations, from immigration, change of resi- 
dence, and the opening up of new territory, we can form some 
estimate of the Herculean labor which such a production will in- 
volve. In dealing with Mr. Homans' observations, it should be 
known that the Mutual is one of the very best conducted life 
offices in the States ; its officers are men of the first intelligence 
in their several departments, and its business is of equal magni- 
tude with any of the life offices in Great Britain. Mr. Homans 
was, we believe, United States astronomer before he took his pre- 
sent appointment. These facts will point to the following infer- 
ences — (1) That the lives have been very carefully selected, and 
that therefore the mortality results are more favorable than that 

* In the Fifth Report of the Registrar-General, Dr. Farr makes the following observation 
on the same subject :— " The mean duration of life in France, according to Duvillard's 
Table, is only 2876 years. The duration of life is, I believe, longer in England, than in any 
other country ; but it is scarcely credible that the lives of Frenchmen should be 12 years 
shorter than the lives of Englishmen, and 10 years shorter than the lives of Swedes." 



188 -EXPERIENCE OF MUTUAL LIFE COMPANY OF NEW-YOKK. 

of the general population, or than that of less prudently managed 
offices ; and (2) that the investigation has been conducted with 
sufficient scientific skill and business aptitude to render its results 
reliable as far as they profess to go. 

The mortality experience of that office is less favorable up to 
age 33 than that shown by the English " Experience" Table; and 
for all ages beyond 33 up to 70 more favorable. From 70 to 75 
the results are identical. The most favorable period shown is 
that from 35 to 45. The President of the Society, Mr. F. S. Win- 
ston, thus sums up the results, " our own experience, though more 
favorable than the Actuaries' [experience] Table, or that of any 
other known, both in its pecuniary results and in its relative mor- 
tality, compares more nearly to the Actuaries' than to the Car- 
lisle or Northampton Table." — Preface to report, p. iii. 

The method adopted by Mr. Homans to distinguish the expected 
mortality of his office from that actually experienced, was at once 
so clear and simple that it was certain to be hereafter generally 
adopted for popular purposes. 

The extent of country, and the varieties of climate, occupa 
tion, and habits of life on the North American continent, present 
features of difficulty which have to be provided for by the Life 
Offices doing business there. The usual classification of locality 
is as follows : — Class I. New-England States, New- York, Penn- 
sylvania, New-Jersey, Delaware, Maryland, and part of Virginia. 
Class II. Michigan, Wisconsin, Iowa, Illinois, Indiana, Ohio, 
Missouri, Kentucky, and part of Arkansas and Tennessee. Class 
III. Georgia, North and South Carolina. Class IV. Texas, 
Mississippi, Alabama, Florida, Louisiana. Class V. The West- 
ern Territories and California. Class VI. The Mississippi Valley, 
within ten miles of the Mississippi and Missouri rivers, north of 
38 deg. lat. With an extra class (VII.) for risks in foreign 
countries, sea risks, and all not included in the other class. Mr. 
Homans' investigation embraced the results of most of these seve- 
ral classes. 

While upon the subject of the mortality of assured life in the 
United States, we ought perhaps to say a few words upon the 
supervision to which the Assurance and Insurance Companies 
there are subjected. The people have recognised the responsi- 
bilities which are undertaken by these institutions, and are not 
disposed to leave the performance of those responsibilities to 
chance or accident. They have organised departments for the 
especial supervision of the Insurance institutions of each State. 
The companies are compelled to make periodical returns of all 
policies issued, of all premiums received and losses paid in respect 
of such policies, and of all available funds to meet outstanding 
liabilities under their policies. Copies of all their actuarial valu- 
ations, even down to the detailed value of each individual life 
policy, must be forwarded to the department, and this is no idle 
form ; for the superintendents of the departments check each of 



EXPERIENCE OF ROYAL INSURANCE COMPANY. 189 

the returns, and if they are not fully satisfied of the ability of 
the Company to perform all the obligations it has undertaken to 
its policy holders, its operations are forthwith suspended. This 
may appear at the first glance harsh, but it is most essentially just 
and practical. Assurance is a sacred trust, and the people there 
are wise enough so to regard it. Those who have had the advan- 
tage, as we have had, of becoming personally acquainted with the 
chiefs of the Insurance departments of the State of New- York 
(the Hon. William Barnes, of Albany), and of the State of Massa- 
chusetts (the Hon. Elizur Wright, of Boston), know with what 
conscientious industry the duties, we ought to say the labors, of 
their office are performed ; and their annual reports are now 
looked forward to with nearly as much interest on this side of the 
Atlantic as on their own. As we have already stated, the Life 
Offices of the United States are at present almost invariably 
based upon the Carlisle 4 per cent, table. 

EXPERIENCE OF ROYAL INSURANCE COMPANY. 

The most recent, and, in many respects, the most remarkable 
experience of any individual office is that of the Royal, compiled 
and published first in 1860, and latterly in 1865, by its able and 
clear-minded actuary, Mr. Percy M. Dove. The curious anomaly 
has heretofore existed, that whereas the prudent and efficient 
management of the business of Life Assurance is a matter in 
which a very large number of persons are interested, the method 
of demonstrating such results have been so crude and technical 
that but a very small number of persons could be made to com- 
prehend them. Now we hold that it is impossible to make any 
principle permanently popular unless it be capable of being gen- 
erally understood. We believe Mr. Dove rendered some essen- 
tial points in the practice of Life Assurance capable of being gen- 
erally understood. His reasoning is simple, — whereas certain 
results were expected ; but this is what has happened, and the 
picture is before your eyes : the elements of comparison side by 
side — the conclusion inevitable. 

We know something of the difficulties of popularising Life As- 
surance. There is much in it that can never be popularised in the 
strictest sense ; but the essential points can be, and have been in 
the Tables under review. These essential points are — (1) a sound 
basis, (2) able and economic management, (3) sufficient financial 
resources to meet all outstanding engagements. All these things 
can, indeed, be demonstrated in words and figures, and have hith- 
erto been mainly so rendered. But the great majority of persons 
cannot gather a distinct idea of the point to be conveyed to the 
mind, by a mere comparison of figures. Even actuaries have found 
the advantage, not to say the necessity, of diagrams to illustrate 
certain points of comparison ; but for the most part, and to the 
great majority of persons, the diagrams of ordinary use would be 



190 EXPLANATION OP THE DIAGRAMS. 

no improvement upon the words and figures, in a popular sense. 
But Mr. Dove introduces the additional element of color, and so 
confirms the poetic sentiment — 

" Pictured morals charm the mind, 
And through the eye instruct the heart." 

He makes the eye perform the work of comparison instead of the 
reasoning faculties. 

We have been so much struck with the uses to which this class 
of diagram may be applied in illustrating the essential points of 
Life office management, that we have resolved to furnish our 
readers with a few special directions concerning these. The dia- 
grams may be obtained gratis from the office of the Royal, or from 
our publishers. The scientific reader will gather from the figures 
surrounding the diagrams their more exact details. 

General Explanation op Diagrams. — Every Life office is, or 
ought to be, based on a mortality Table, which will define what its 
mortality should be expected to be over a given number of lives of 
varying ages. The yellow in diagram No. 1 represents that ex- 
pectation. We may, from its shape, call it a mountain. The size 
and shape will vary with the varying circumstances of each par- 
ticular office ; but every office must have its mountain of expecta- 
tion. The violet represents the actual experience — the actual 
deaths. That may be regarded as another mountain standing 
immediately in front of the former one. Now if the violet moun- 
tain at any time should entirely hide the yellow mountain from 
sight, it would follow that the experience had been greater than 
the expectation, and the office would be in a worse position than it 
ought to be. If, indeed, it should happen (and such a coincidence 
would be indeed remarkable) that the two mountains were pre- 
cisely of the same size, then just what was originally expected 
would have happened ; but whenever the yellow mountain shows 
a margin over the violet one, its mortality has been favorable to 
the extent of that margin, making due allowance and abatement 
for the few projecting violet peaks, which owe their origin chiefly 
to the fluctuations incident to small or disproportionate numbers. 
The careful selection of lives, in the absence of extraordinary epi- 
demics, determines the preponderance of yellow over violet, al- 
ways assuming the mortality table upon which the office was 
founded to be equitably adapted to the class of lives intending to 
be assured. 

In diagram No. 2 we have the pecuniary results shown, namely, 
how much money the office expected to pay for claims arising from 
deaths, and how much it actually has paid. The yellow moun- 
tain shows the expected payments, the violet mountain and its 
peaks the actual payments. The peaks are occasioned by the 
variations in the amounts of the policies, as well as in the number 
of deaths. Now, then, it is clear that if the violet mountain over- 
topped at all points the yellow one, the office would have paid 



GENERAL DEDUCTIONS FROM THE TABLES. 191 

away more money than it ought to have paid. If the mountains 
were precisely equal, no harm would have occurred. But all the 
yellow which is visible (less, violet peaks to be deducted) is just 
so much gold accumulated by the careful selection of lives, and 
sound management in other respects. What can be a simpler 
test ? Mr. Dove frankly acknowledges his indebtedness to our 
friend Mr. Homans for the idea. Every agent of every office 
should thank Mr. Dove for popularising a test which may, and 
ought to be, applied to all Assurance Companies founded on sound 
principles. It would not follow that, because a Life office at any 
given period was up the wrong mountain, that it might not by 
prudence and care set itself right again. By a little addition to 
the diagram, a third mountain might be added, of the total avail- 
able resources of the Company. This should be the larger of the 
three. 

With regard to the comparative results of the Royal Ex- 
perience Table, it is more favorable at nearly all ages than the 
" Experience" Table of the seventeen offices, especially in all the 
younger ages, up to 42. 

A very curious feature in connection with the Royal Experience 
is that the officers and agents of that Company, acting under the 
instructions of the actuary, have kept in view, and, as far as 
possible, recorded the mortality experience of the lives they have 
from time to time declined. The result justifies, in a very marked 
degree, the soundness of the discretion exercised, and is as unique 
in practice as are several other of the characteristic features of this 
powerful and popular office. 

The following general deductions may be drawn from the 
remarks offered on the various mortality Tables we have passed 
under review. Halley's Table was not based on English data, and 
therefore afforded but little guide to the duration of English life. 
It is chiefly noticeable as being the first known Life Table con- 
structed upon correct principles. The Northampton Table, being 
founded on incorrect data, was never of much value in deter- 
mining the duration of life. Its chief fault is, that it favors old 
lives at the expense of the young ones. Annuity Societies based 
upon it (except after considerable correction) are certain to sus- 
tain loss. The Carlisle Table at first gave a longer duration of 
life than actually existed, taking the country throughout, but 
owing to a rapid improvement in the mortality of the kingdom, 
it soon came to be a pretty correct guide ; and the Offices founded 
on it have, for the most part, been eminently successful. It now 
pretty closely represents assured life, as far as the results are 
known. The Equitable Society Table was chiefly valuable 
by reason of its being deduced entirely from assured life, and 
as confirming very generally the accuracy of the Carlisle Table. 
The Government Table was based on the experience of the life of 
annuitants as distinguished from assured life. From causes 



192 GENERAL DEDUCTIONS FROM THE TABLES. 

which we have already noticed, it gives an expectation too 
low for males, and too high for females. It may, however, be 
of great use to Annuity Societies. The ExperieDce Table may be 
looked upon as the best exponent of the expectancy of assured life 
at the present time ; as the English Life Table is undoubtedly the 
best exponent of the general mortality and expectancy through- 
out the kingdom. Most new Offices, we suspect will adopt it. 
Deparcieux most probably over-states the value of French life at 
the present time. 

Professor de Morgan has called attention to the fact that, at 
least, some part of the difference which is observable in the 
several mortality Tables is due to the " real improvement of life 
which has taken place from the introduction of vaccination, more 
temperate habits of life, better medical assistance, and greater 
cleanliness in towns." All these points will be considered in the 
next division of our subject; and, in closing this chapter, we 
feel, with the North British reviewer, from whom we quote, fully 
warranted " in asserting, without qualification, that the law of 
mortality has been ascertained so accurately, from sufficient data, 
as to admit of the most confident reliance on its general opera- 
tions." * 

* North British Beview, Nov., 1849.— Art., Insurance. 



CHAPTER II. 

THE THEORY AND PRACTICE OF LIFE ASSURANCE CONTINUED. 

Haying now seen that the duration of human life, in this 
country at least, has beeu reduced to a certainty, for the varia- 
tions in the several mortality Tables passed under review are, 
we believe, all satisfactorily accounted for, and therefore tend 
rather to confirm than cast a doubt on this conclusion — we are 
in a position to advance another step. This however must be 
done steadily ; for if we fail to make ourselves understood at 
this point the connexion will be lost, and much that follows 
rendered unintelligible. Let us then recapitulate, and bring to 
our aid one or two simple illustrations. The theory is, — that 
while of all things the duration of individual life is the most 
uncertain, that of a number of individuals is, in the aggregate, 
unmistakeably certain. So that out of a multitude of persons 
of a given age, it may be predicted with considerable accuracy 
how many will die each year until the whole are extinct. 

The method of arriving at this mean duration of human life 
has been already explained in the preceding chapter, but a further 
illustration may be advantageous to the reader, and useful in an 
example which is to follow. Take the number of years lived 
through by a person from birth to death, and also of a thousand 
others born at the same time, and dying at all ages from 1 to 100 
years old. The number of years thus lived through by each 
person being added into one sum, and being divided by the num- 
ber of persons, the mean duration of life is ascertained. Thus, 
if the first ten persons of the number referred to lived one year 
each, the next ten two years, and so on, every succeeding ten 
taken note of having survived each one year more than the pre- 
ceding ten noted, the number of years (there being 100 times 10, 
or 1000 in all) which would be lived through by the last ten 
would be 100 years each, and the total years lived through by 
the whole number collectively would be 50,500 ; and the sum 
being divided by the number of persons, gives a term of 50^- 
years as the mean duration of each. 

It is not intended to say that the above is the true mean of 
existence brought out by experience. It is indeed only an ex- 
ample of the method employed to arrive at a basis for calcula- 
tion. 

A writer, whose clearness of style and facility of illustration 
will have to justify us in laying him several times under contribu- 
tion in the course of this chapter, presents us with the following 
examples of the practical application of the theory on which 
Life Assurance is based. 



194 MAIN ELEMENTS IN LIFE ASSURANCE. 

" To proceed now with the inference which we may draw from the fact now 
held as proved, that the mean duration of life is a fixed quantity, it follows 
that if each of 1,000 individuals were to treat with a Company granting an- 
nuities on lives, and (as we shall suppose for the sake of simplicity) neither 
giving interest for the purchase-money of the annuity sold by them, nor taking 
interest for the annual payments of annuity made by them, each man paying 
down for an annuity of £1, to be paid yearly, the sum of fifty pounds ten 
shillings, the Company would neither gain nor lose by the transaction, as is 
plain from the fact of the mean duration of each life on the supposition we 
have gone upon being exactly fifty years and a half. Some individuals would 
draw from the Company in all the sum of £100 each, and would be gainers ; 
but others would draw only the sum of £1 each and would be losers. The 
gain would, however, upon the whole, balance the loss, and at the end of 100 
years, the period of existence of the longest lives, the last £1 would be drawn 
from the coffers of the Company, and the whole body of annuitants, each 
having drawn his annuity of £1 during his life, would become extinct." 

The example is then reversed, and applied to Life Assurance 
in the ordinary method : — 

" The same body of 1,000 individuals in place of paying down a round sum 
at once, and receiving a small annual return, choose to engage to pay to the 
office a small sum annually, and the office agrees to pay a round sum at the 
death of each. Interest, as in the previous example, is thrown out of account, 
and the office is not supposed to pay anything more than the actual sum it 
receives. Each individual of the 1,000 pays to the office during every year 
of his life the sum of £1 yearly, and the office in return agrees to pay £50 
10s. to every man on the day on which he dies. A moment's consideration 
will show that the office is equally safe in this transaction, and equally cer- 
tain of fulfilling its engagements, as in the instance of an annuity. One man 
pays in £1, and dies at the end of the year ; the office pays him on the day of 
his death the sum of £50 10s., and thus he is a gainer. Another man pays 
into the office £1 annually for 100 years, and upon the day of his death the 
office pays him the sum of £50 10s. — he is thus a loser. And in the same 
way the other individuals are some losers, others gainers ; but the gains 
exactly correspond with the losses ; and at the end of 100 years the sum of 
£50 10s. has been paid by the office to every man, and with the last payment 
its coffers have been exhausted."* 

The interest referred to in the preceding examples opens up 
to the reader a new phase of the subject. Another element is 
introduced : and it is now seen that the main considerations in 
the practice of Life Assurance are — Lives and Monet, i.e., the 
probable duration of life, and the probable interest which money 
will realize over, or during a series of years. " These two mat- 
ters of fact," says an able writer in the North British Heview, 
" These two matters of fact — the rate of mortality, and the rate 
of interest — being ascertained and assumed, the groundwork is 
laid for proceeding to the business of actual assurance, and to all 
transactions in which the pecuniary interest of individuals is 
dependent on the value of life." Various collateral considera- 
tions surround the question which we shall deal with as we 
proceed. At present we must confine ourselves to the points 
immediately before us. 

The important operations of interest, we frequently find too 
little understood even in the ordinary routine of business : we 

* The above remarks are extracted from a clever little book published about thirteen 
years ago, entitled the Handbook of Life Assurance, long since out of print. 



THE WORKING OP AN ASSURANCE FUND. 195 

may, therefore, fairly assume it to be even less so when applied 
to the more complicated practice of Life Assurance. We do not 
purpose to go further into the question now than appears neces- 
sary for the full understanding of this section of the subject. 
In a future section we shall enter further into the details of its 
operations; and we may fairly predict that the results will 
astound the majority of our readers. 

The effect of interest on the examples just given would be in 
the one case to raise the annual return given by way of annuity 
above what would be given in the case of no interest being allowed, 
and in the other to diminish the annual payment to be made to 
the Office for benefit guaranteed by them to be paid at death on an 
assurance. 

We may now venture upon another example, which will bring 
us nearer to the actual practice of Life Assurance, premising, 
however, that it, like its predecessor, has been employed by pre- 
vious writers.* It is founded on the Northampton Table, and 
therefore must be understood to be only employed for the pur- 
pose of illustration. This Table shows that out of every 11,650 
persons born alive, 46 will be living at the age of 90: of these 12 
will die in the course of the first year, 10 during the second, 8 dur- 
ing the third, 7 during the fourth, 5 during the fifth, 3 during the 
sixth, and the last remaining life will fail in the course of the 
seventh year. " It is," says a writer in the periodical just referred 
to, " a favorite mode of exemplifying Life Assurance calculation 
to suppose these 46 persons, aged 90, associating for the purpose 
of assuring £100 to each at death. They are supposed to proceed 
upon the principle of paying all that is required in one sum at 
first, thus forming a fund which is to answer all the de- 
mands which are to be made upon it." The advanced age of 
90 has been adopted with a view to shorten the example, which 
if a younger age were given would be long and tedious. The 
interest assumed is 3 per cent. — that being the rate at which the 
fund is supposed to be improved ; and the objectis to ascertain 
what sum, by icay of present payment, each is to contribute to 
the fund, so that it may discharge £1,200 the first year, £1,000 
the second, £800 the third, and so on. In order then to dis- 
charge — 

£ £ 

1200, at the end of the first year, the j 1200, discounted at 3 per 

society must be provided with ( cent., for one year . . . 

1000, at the end of 2nd year, 1000, ditto, for 2 years . . 

800, at the end of 3rd year, 800, ditto, for 3 years . . 

700, at the end of 4th year, 700, ditto, for 4 years . . 

500, at the end of 5th year, 500, ditto, for 5 years . . 

300, at the end of 6th year, 300, ditto, for 6 years . . 

And in order to discharge the remaining £100 at the end of the 

seventh year, with £100, discounted at 3 per cent., for seven 

years 

In all £4,225 10 9 

* Vide Chambers' Information for the People, art., Life Assurance. 



£ s. 


d. 


1165 1 





942 12 
732 2 
621 18 
431 6 
251 5 




7 




81 6 


2 



196 



COMPLETION OF THE ASSUKA.NCE FUND. 



This, divided by 46, gives £91 17s. 2d. as the sum (technically 
called premium, although paid in one sum) which each person 
would need to pay at the foundation of the Society; and this sum 
of £91 17s. 2d. is the present value of a reversion of £100 at the 
age of 90, according to the Northampton Tables, taking interest 
at 3 per cent. 

To continue the illustration : supposing such a Society to be 
constituted, and £4,225 10s. 9d. to be paid in by the 46 members, 
we shall next see how its business would proceed until at the 
close of seven years " death put a period to the account :" — 



The original contribution of £4225 10s. 9d. being put out to in- 
terest, at the end of the first year amounts to £4,352 

From which deduct for the twelve lives which fail in the course 
of the year 



Fund remaining at the commencement of the second year . . 

Which, bearing one year's interest, will amount to 

From which deduct for the ten lives which fail in the course 
the year 

Fund remaining at the commencement of the third year 

Which, bearing one year's interest, will amount to 

From which deduct for claims 

Fund remaining at the commencement of the fourth year 

Which, bearing one year's interest, will amount to 

From which deduct for claims , 

Fund remaining at the commencement of the fifth year 

Which, bearing one year's interest, will amount to 

From which deduct for claims 

Fund remaining at the commencement of the sixth year 

Which, bearing one year's interest, will amount to 

From which deduct for claims 

Fund remaining at the commencement of the seventh year 

Which, bearing interest, will amount to 

Which will exactly discharge the last remaining claim 



5 2 



1,200 



. 3,152 5 


2 


£3,246 16 
f 
1,000 


8 



2,246 16 


8 


£2,314 8 
800 


2 



1,514 8 


2 


£1,559 16 
700 


8 



859 16 


8 


£885 10 
500 


5 



385 10 


5 


£397 1 
300 


8 



97 1 


8 



£100 
100 



Inasmuch as lives are insurable from the age 15, indeed in some 
Offices from birth, to follow the calculation through in this man- 
ner would be a very serious and lengthy business, and no end 
would be gained beyond that already secured. All persons of 
the same age in any particular Life Office, are considered as a 
distinct group assuring each other, and the calculations are fol- 
lowed out, in effect, in the manner above described. It is quite 
immaterial, so far as the advantage of an Office is concerned, at 
what age a person commences to assure his life : the variation in 



LIVES AND MONEY CONSIDERED. 197 

the premium at each age is graduated so as to meet the increas- 
ing risk at the advanced ages ; and although it is customary with 
Offices not to assure persons at ages much beyond 60, the reason 
is rather because sufficient numbers cannot be obtained at the 
advanced ages to constitute a proper average, than from any 
difficulty in deciding upon the rates. It is also quite the same 
thing to an Office with an average number of lives, whether the 
premiums be paid down in one sum (as in the previous examples) 
or by annual, half-yearly, or even quarterly payments. 

We do not purpose entering more fully into details respecting 
the construction of rates of premium here, a separate section in 
this division is set apart for that purpose, and in that the rates of 
all the existing Offices are classified. Our present object is rather 
to direct prominent attention to the fact, that it is not upon a 
knowledge of the duration of life alone, however carefully that 
may have been ascertained, that the working of Life Offices de- 
pends, for at every turn, and in every calculation, the element of 
interest plays an important part. 

This brings us to a point at which we may again assert, 
without fear of being misunderstood, that Lives and Money are 
the two fundamental elements upon which the structure of Life 
Assurance has, and must, continue to be raised. This fact is no 
discovery of ours. Other writers have preceded us in dealing 
with it ; and the reader shall have the benefit of their conclusions : 
for we are most thoroughly convinced that if this circumstance 
be lost sight of, all attempts to understand the relative capabili- 
ties and advantages of Offices will fail, and we now proceed to 
strengthen this position. 

The talented author of a pamphlet, entitled " Life Assurance ; 
its Schemes, Difficulties, and Abuses," * which has been much 
read, says: — 

" The scheme of Life Assurance is supported solely on the hypothesis, that 
the contributions of the members taken year by year, and invested in some 
fund which will produce an interest thereon, will be sufficient of themselves 
to pay the representatives of each member when his life drops in, the sum 
assured under his policy. The truth of this hypothesis evidently depends 
on several considerations ; the most important of which are as follows : — 1st. 
That the probable average duration of life shall have been correctly estimated 
by the Society, more especially that it shall not have been overrated. 2nd. 
That the full rate of interest assumed by the Society in its calculations shall be 
actually realized on all its funds. 3rd. That a surplus shall be annually 
created, at least sufficient to discharge all the expenses of management. 4th. 
That an equal, or nearly equal, degree of risk shall be distributed over all 
the lives : and 5th. That the funds of the Society shall be invested in such 
securities as will not fail to reproduce them undiminished in value when 
required for the necessities of the Institution." 

It will be observed that the three last considerations, although 
very important ones in practice, are entirely subordinate to the 

* Published at the Post Magazine Office, price Is. 



198 IMPORTANCE OF SOUND MANAGEMENT. 

main considerations in the first and second propositions : which 
entirely correspond with those we have laid down. 
Another writer of ability says :— 

"In attempting to judge of the merits of the various Associations for Life 
Assurance, the subjects with which they have all to deal — namely, Lives and 
Money — should always be considered in the first place. By making these the 
grounds of enquiry and reasoning, the necessary general results as affecting 
the interests of individual assurers should not be difficult to ascertain. The 
intended assurer should not allow himself to be bewildered by the apparent 
intricacies or discrepancies of the different schemes of Life Assurance Com- 
panies. However intricate they may appear, whatever different advantages 
they may promise, in order to lead the assurer within their own doors, let him 
always remember that they have one common basis, and one only, on which their 
separate Institutions are raised. The benefits they afford all arise — first, 
from a proper selection of persons to be assured ; and, secondly, from the 
accumulation of money to be received from them. No other matters can enter 
into the true causes of the success or prosperity of Life Companies ; and a very 
little examination will show that, speaking in a general sense, the persons 
assured should derive the same benefits from every Life Company, provided 
always that the premiums paid by the assured be properly adjusted according to 
the different ages, and the system of returning the surplus arising from the 
excess of premiums be just and equitable. Where," continues the writer, " any 
Company pretends that its scheme affords peculiar benefits, the pretended 
advantage is only apparent. It cannot arise from that Company making 
more for their money and lives, during a certain period, than others do. In 
that respect all Companies will on an average be equal. Any apparent advan- 
tage must only arise from a peculiarity in the plan of distributing the gains on 
the money and lives. As the success of all Societies depends upon the same 
circumstances, it will be seen that no Assurance Company can give superior 
benefits without making the insured pay in the exact proportion of the 
higher benefit. No insurer ought to complain of such a result ; but let every 
one intending to assure carefully examine, and think a little for himself, lest 
he find out, when it is too late to remedy the error, that he has joined a Com- 
pany to whom he must pay more than he ought to have done for the promised 
benefit. The long experience of established Companies, and the enquiries of 
scientific men, will enable every one to judge what he ought to contribute to 
secure the benefits of Life Assurance."* 

Some qualification is required to several of the propositions in 
the preceding paragraph : although as a whole, they admirably 
enforce the considerations we have advanced. It is obvious that 
superior management — in which economy is included — will 
speedily advance the office so placed, or, we might say, in these 
days of official extravagance and incapacity, so blessed, in a posi- 
tion far before others started at the same period and on the same 
principles, but conducted with less prudence and skill. Skilful 
management, indeed, is a vital question with an Insurance Office. 
However soundly constituted, without this, an office will become 
a wreck. It is like a strong ship with an incompetent com- 
mander, like a noble frame with a diseased heart. The careless 
selection of lives — the imprudent investment of the funds — and 
costly management, are breakers a-head, are all derangements of 
the system, which at any moment may arrest its career. A 

* John Sturrock, jun.'s pamphlet on Life Assurance. 



IMPORTANCE OF SOUND MANAGEMENT. 199 

writer in the Morning Herald, during the period of the assurance 
controversy (a few years since) even went the length to assert 
that the w hole question of security and prosperity was "confined 
to the administration of their business affairs," and " not whether 
the rates of premium were sound or unsound," and to a very 
considerable extent he was right. 

Mr. Finlaison has indeed proclaimed a third element, which, 
considering the authority, deserves to be noted. This is the 
character of the investments of an Assurance Office. His views 
thereon may be gathered from the following (question 586) — 
" Then, if I rightly understand you, there are three elements in 
the calculation. The first is the element of risk, which must 
depend upon the computation of life ; the next is the element of 
interest, which defines the supposed annual income from premiums 
in hand ; and the third is the character of the assets in which the 
capital of the Company is invested f n To which Mr. Finlaison 
replied, " certainly." In answer to a subsequent question he 
pointed out that interest was the agent of increase in the funds 
of an Assurance Office, adding, "and when interest above the 
rate contemplated in the calculation is realized, the surplus of 
interest so obtained is converted into capital, and is of course 
invested with capital as occasions arise, and the safety of an 
Assurance Office, no doubt, in a great measure depends upon the 
validity of the securities which it has taken."* 

We think, however, this point may be fairly included in the 
general consideration of " money," and now proceed to the 
next stage. 

* Vide Evidence before Select Committee on Assurance Associations, 1853. 



CHAPTER in. 

INTEREST HISTORICALLY CONSIDERED. 

In tracing the progress of Life Assurance we took occasion to 
direct attention to the early writers on the subject of Interest. A 
correct understanding of the operations of the latter was necessary 
to the proper development of the former. Their growth, there- 
fore, was almost necessarily concurrent, and to some extent identi- 
cal: for the earlier writers directed attention to both. Mr. Hodge, 
in an excellent paper on the rates of interest for the use of money 
in ancient and modern times, recently read before the Institute of 
Actuaries, says — "The object of the actuary, in applying the 
science of vital statistics to pecuniary transactions, being to de- 
termine the values of payments dependent upon conditions of 
human survivorship, and therefore necessarily deferred for periods 
of longer or shorter duration, it is obvious that the rate of inter- 
est at which money may be increased is an element of his calcula- 
tions, nearly if not quite as important as the probable risk of 
mortality that may affect the lives involved."* We purpose to 
glance at the subject historically now, and practically in another 
section. 

Interest, in the sense of a recompense or return for money lent, 
must have originated very early in the world's history, probably 
dating with the earliest mercantile transactions. There are fre- 
quent allusions to it in the Scripture, chiefly however under the 
title of "usury," which appears to be the old English word for 
interest. In the Latin this word signifies money paid for the use 
of money lent ; but the more learned assert it to be a Hebrew ex- 
pression signifying " that which bites " — an exceedingly proper 
derivation as the term is now understood ; but it was originally 
applied to all profit paid for the use of money.f The term usury 
is now understood only in the sense of taking more interest for 
the use of money than the law allows. Hume, the English histo- 
rian, speaks of the adoption of the word interest as " a lucky acci- 
dent in language which has great effect on men's ideas." Another 
historian, Robertson, tells us that the fixed rate of interest in the 
12th century was 20 per cent. In 1560, it was fixed in Spain, 
Germany, and Flanders, by the Emperor Charles V., at 12 per 
cent. Till the 15th century no Christians were allowed to receive 
interest of money, and Jews were the only usurers. This led to 
the frequent persecution and banishment of this sect of wanderers. 

We learn, upon what appears to be good authority, J that the 

* Vide Assurance Magazine,Yol. vi., p. 310. 

t Vide Mr. Hodge's Paper. 

X Bceckh's Public Economy of Athens, translated by Sir G. C. Lewis, 1842. 



EARLY ALLUSIONS TO INTEREST AND USURY. 201 

lowest rate of interest in Athens was 10 per cent, per annum, and 
the highest 36 per cent.; the ordinary rate being from 12 to 18 
per cent. In Rome similarly exorbitant rates were exacted ; but 
the wisdom of her lawgivers soon devised some reasonable re- 
strictions. About the year b.c. 346, the rate was limited to 5 per 
cent. ; and five years later (b.c. 341), in a time of great public com- 
motion, and amid distress so severe and universal as to cause a 
general bankruptcy, or entire abolition of all debts, the practice 
of taking interest for money was altogether forbidden, and he 
who received more than he had advanced was rendered liable to 
four-fold restitution.* These prohibitions continued some time in 
force, although they were frequently evaded. How long they 
exercised a beneficial influence we cannot say ; but we are told 
by Adam Smith that the " virtuous Brutus," who flourished in 
the last century before the birth of Christ, " lent money in Cyprus 
at 48 per cent.," as indeed may be learned from the letters of 
Cicero. Under Alexander Severus (a.d. 230) the rate at Rome 
was reduced by legal enactment to 4 per cent. 

It is not to be wondered, when such extortionate rates of in- 
terest from time to time prevailed, that usury grew very early, 
and very much, into disrepute. In the book of Ezekiel, (xviii. 13,) 
he that " hath given forth upon usury, and hath taken increase," is 
placed in the same class and threatened with the same judgments 
as the idolater and the adulterer, the robber and the shedder of 
blood. In the fifth chapter of Nehemiah, 10th verse, it is written, 
"I pray you let us leave off this usury;" and in the 11th verse, 
** Restore, I pray you, to them, even this day, their lands, their 
Adneyards, their olive yards, and their houses ; also the hundredth 
part of the money, and of the corn, the wine and the oil, that ye 
exact of them." So that interest was probably taken "in kind," 
as well as in money. " The hundredth part," here referred to, is 
supposed to have been a monthly return for money on goods lent, 
being at the rate of 12 per cent, per annum, ■' which is supposed 
to have been the usual rate of interest in Judea at the time."f 

The earliest enactment upon the subject mentioned in English 
history, is an Act passed in the reign of Richard I. (a.d. 1197), 
forbidding Christians to take interest for money. It is mentioned 
in Macpherson's History of Commerce, as one of the conditions 
of Magna Charta, granted in the 17th year of John (15th June, 
1215), " That the debts of a minor shall not bear interest, whether 
they be owing to a Jew, to the King, or any other person :" a 
statement, says Mr. Hodge, that would tend to show it was 
not only permissible but usual for the King and his Christian sub- 
jects to practise usury ; and Macpherson remarks, " This would 
seem to authorize interest, though repeatedly forbidden by the 
ecclesiastical canonsP Twenty years later (1235) the statute of 
Merton, 20 Henry III., enacted that " usurers shall not run against 

* Hodge, quoted from Arnold, ii., p. 126. + Hodge, p. 303. 



202 THE LOMBARDS AND THE JEWS. 

any within age from the time of the death of his ancestor, whose 
heir he is, until his lawful age." 

It was about this period that a number of wealthy Italians left 
their native cities, where they had acquired their riches by com- 
merce, and spread themselves through Europe in the capacity of 
money-lenders. They settled in London in large numbers, and 
engaged in marine insurances and other speculations suited to 
their vast pecuniary wealth. They were called " Lombards," 
and their locality yet bears their name : it is still the street of 
money-lenders, banks, insurance brokers, and bill discounters. 
The Lombards grew into repute both with sovereigns and the 
clergy, and to a great extent usurped alike the business and the 
wealth of the Jews. An open warfare, indeed, was waged 
against these latter, more particularly by those who were in- 
debted to them, and who for obvious reasons were desirous of 
seeing them expelled the country. Henry II. levied heavy exac- 
tion upon them ; and at the coronation of his successor, Richard 
I., the populace, apparently under the Royal sanction, massa- 
cred and plundered all the individuals of that unfortunate class 
who fell into their hands. In the following year (1190) a similar 
outrage took place in York, and Hume tells us, "The gentry of 
the neighborhood, who were all indebted to the Jews, ran to the 
Cathedral, where their bonds were kept, and made a solemn bon- 
fire of the papers before the altar." Stow, in his Survey of 'Lon- 
don, says (a.d. 1263,) "The barons slew the Jews at London, 
seven hundred ; the rest were spoiled, and their synagogue de- 
faced, because one Jew would have forced a Christian to have 
paid more than two-pence for the loan of twenty shillings a 
week." And a few years later (1290) Edward I. banished all 
the Jews from England, confiscating the whole of their property, 
with the exception of sufficient " to beare their charges till they 
were out of his realme." Stow says the number so expelled was 
15,060, whose houses being sold, "the King made a mighty 
masse of money." 

The spirit which tolerated or directed these persecutions suf- 
ficiently accounts for some of the legal enactments which fol- 
lowed. The " Statute of Jewry," passed in the reign of this 
Edward, after reciting that the King has seen divers evils and 
the disinheriting of good men of his land from the usuries of the 
Jews — albeit he and his ancestors had received much benefit from 
the Jewish people in times past — enacts " nevertheless, for the 
honor of God and the common benefit of the people, that from 
henceforth no Jew shall lend anything upon usury, either upon 
land, or upon rent, or upon other thing, and that no usuries 
shall run in time coming from the feast of St. Edmund last past 
(retrospective legislation!); and if any Jew shall lend at usury, 
contrary to this ordinance, the King will not lend his aid, neither 
by himself nor his officers, for the recovery of the loan, but will 
punish him at his discression for the offence." After regulating 



STATE LIMITATION TO THE RATE OF INTEREST. 203 

the places of residence of the Jews — Old Jewry and Jewry- 
street, Aldgate, were probably among these — the statute further 
enacts " that every Jew above seven years of age shall wear a 
badge, and every one above twelve shall pay threepence tax 
yearly to the King, ' whose bondsman he is.' " This statute is 
attributed, by Mr. Hodge, to the influence of the Lombards, 
" which about this time had reached its highest pitch at the Eng- 
lish Court." The next general enactment bearing upon the sub- 
ject, of which we have any direct knowledge, was passed in the 
3rd Henry VII. (1488,) and is entitled "An Act against Usurie 
and Unlawful Bargaynes," and recites that "ymportable dam- 
ages, losses, and empoverysshing of this realme, ys had by 
dampnable bargaynes, groundyt in usurie, colorde by the name 
of new chevesaunce (agreement), &c. &c." and enacts that all 
such contracts shall be void, and the seller, owner, bargainer, or 
promiser be liable to a penalty of £100 for every such bargain. 
The " Chancellour of Inglonde " was empowered to try such 
causes out of the city or burgh where the offence took place, as 
probably from local influences " lytell of the premysses " would 
be fulfilled. The Act itself was, however, repealed eight years 
afterwards on the ground that it was " so obscure, darke, and 
diffuse, that the true intent of the makers thereof could not be 
perfectly understood." The prohibition of usury, however, was 
again enacted, with the penalty of the forfeiture of one moiety of 
the goods, chattels, or merchandises that might be the subject of 
usurious bargains.* 

Some of our readers may not have discovered the bearing of 
this apparent digression on the subject under consideration. The 
early abuses in connection with usury first directed the attention 
of the Legislature to provide remedies ; and ultimately led to 
the fixing, or limiting, the rate of interest by the State ; a step 
which, although no doubt fraught with many and serious disad- 
vantages, in a highly-developed mercantile community, where 
the laws of supply and demand are understood and appreciated, 
was a great safeguard in a less advanced stage of society, and 
tended to prevent the earlier Assurance Societies from anticipat- 
ing a higher rate of interest than they might afterwards have 
obtained : thus curtailing, at least, one of the elements of misfor- 
tune. At the time we have now arrived at, 1546, in the 37th 
year of the reign of Henry VIIL, the first Act was passed defin- 
ing or limiting the legal rate of interest to be charged in Eng- 
land. This Act recites that " diverse and sondrie actes, statutes, 
and lawes have been ordeyned, had, and made within this realme 
for the avoidance and punishment of usurie," and fixed the rate 
of interest for the future at 10 per cent. It, however, only con- 
tinued in force for seven years, when it was repealed (1st May, 
1552) by the 5 and 6 Edward VI., cap. 20. This last Act was 
entitled " A Bill against Usurie," and after much violent abuse 

* Hodge, page 330. 



204 THE IJSUKY LAWS AND EESTKICTIONS. 

of the "greedie, uncharitable, and covetous persons" guilty 
thereof, re-enacted the prohibition contained in the previous Acts 
we have noted, with nearly similar penalties. 

"Notwithstanding, or perhaps in consequence of, this act," 
says Mr. Hodge, in the paper before referred to, " the ordinary 
rate of interest after it passed was 14 per cent. ;" — Queen Mary 
herself borrowing money of the citizens of London at 12 per 
cent. Concurrently with the last-named act, we are told by the 
same authority, a statute was passed forbidding any but the 
King's Exchangers to exchange or rechange gold or silver for 
the purpose of profit. Many Acts had been directed against this 
practice, which " appears to have been looked upon with as much 
jealousy as usury itself." These must have operated unfavorably 
for the Lombards. 

The statute of 1552 (5 and 6 Edward, cap. 20) remained in 
force until 1571, when it was repealed by the 13th Elizabeth, 
cap. 8, which recites that the said "Acte hath not done so much 
good as was hoped ; but rather that the vice of usurie, and espe- 
cially by waye of sales of wares, and shiftes of interest, hath more 
exceedingly abounded" The limitation of the rate of interest to 
10 per cent., enacted by the 37th Henry VIII., was then revived, 
with the mild penalty, however, that any offender against the 
statute was to forfeit so much as should be reserved by way of 
usury above the principal for any money so lent or forborne. 
Another clause enacted that such offenders were also to be pun- 
ished and corrected according to the ecclesiastical laws against 
usury — a reservation, says Mr. Hodge, of the power of the 
Church included in nearly all the Acts for the repression of the 
offence. The Act was to remain only five years in force, unless 
renewed, which it was several times, and "made perpetual" in 
the 39th year of the reign of Elizabeth.* This perpetuality 
lasted for about 30 years; for in 1624, (21 James I.,) the rate 
was reduced to 8 per cent., and the word interest first used in- 
stead of usury .f The Rump Parliament reduced the rate to six 
per cent., and this was confirmed at the Restoration. In 1714, 
in the 13th year of the reign of Queen Anne, the limitation be- 
came reduced to five per cent., and remained so, with one or two 

* "This salutary statute (says the writer of a clever article on Interest, in the Encyclo- 
paedia Britannica, 7th Ed.) was opposed even by those who it might have been expected 
would have been among the first to emancipate themselves from the prejudices of the ago 
with all the violence of ignorant superstition. Dr. John Wilson, a man famous in his day, 
and celebrated for the extent and solidity of his learning, stated, in his place in the House 
of Commons, that ' it was not the amount of the interest taken that constituted the crime ; 
but that all lending for any gain, be it ever so little, was wickedness before God and man, 
and a damnable deed in itself, and that there was no mean in this vice any more than in 
murder or theft.' In order to quiet the consciences of the bench of Bishops a clause was 
actually inserted declaring all usury to have been forbidden by the law of God, and to be in 
its nature sin, and detestable. At first this statute was limited to a period of five years ; 
but, ' forasmuch as it was by proof and experience found to be very necessary and profitable 
for the commonwealth of this realm,' it was in the same reign made perpetual."— 39th 
Elizabeth, cap. 18. 

t " At the beginning of the 17th century land was commonly bought at 20 years' purchase, 
and never at less than 16 years' purchase ; while at the end of the century it was still at 20 
years' purchase."— De Morgan. 



LIMITATIONS OF THE KATE OP INTEREST. 205 

temporary suspensions, during periods of great commercial pres- 
sure, until a few years, when, for a similar reason, the operation 
of the Act was again suspended, and still remains so. During 
the Protectorship of Cromwell the Jews regained their wonted 
position of money-lenders, and have since retained it without 
much interference or persecution. 

Leybourn, in his Panarithmologia, published in 1693, and al- 
ready quoted in previous chapters, gives us some information as 
to the rates of interest prevalent in this Kingdom at that period, 
160 years ago. Referring to a series of Tables he had published, 
he says, " Each Table may most properly be appropriated to the 
nature of the thing to be purchased, as — 1. The Table of five per 
cent, may most fitly be used in the purchasing of Freehold Land, 
which, for its permanency, and being (of all other purchases) 
least liable to casualties, a man may, for the less profit, part with 
his money in such purposes — 2. The Table of six per cent, {which 
is the present authorised rate for money) may most fitly be used 
in the purchase of Copyhold Estates and in Leases of Land, the 
one being subject to tines on every alienation, and other services ; 
the other being but for term of years, and so may want encou- 
ragement for the improvement of the same. — 3. The Table of 
eight per cent., which may be used in the purchase of leases of 
land, and of good new built Houses, well inhabited, and standing 
in probable places for habitation. — 4. The Table of ten per cent, 
may be used in the purchase of leases of indifferent houses, for 
such are liable to many casualties, as wind, rain, fire, and such 
like, so that no man will lay out his money upon such leases but 
he will have at least ten per cent, profit for his money." This 
reads almost as fresh as a chapter from Ward on Lnvestments in 
the present day. But the rates of interest have considerably 
changed. 

When the Act of Queen Anne is in force, all interest above 
the legal standard of Britain is usury, and punishable under the 
statute. Bills, &c, having less than 12 months to run, are how- 
ever exempted by 1 Vic. c. 80. The law does not recognise com- 
pound interest / and the customary evasion has been by the bor- 
rower granting further acknowledgments of the interest as though 
it were principal — thus capitalising it, which is the true operation 
of compound interest. In banking and mercantile accounts the 
law, indirectly, does admit compound interest. Judgment debts 
carry 4 per cent, interest by virtue of 1 and 2 Vic., c. 110. Or- 
dinary debts do not carry interest unless they be of a class sub- 
ject to that custom amongst merchants and traders, or unless 
subject to special contract. So that the law on this subject can- 
not be said to have arrived at any satisfactory position ; but it is 
not improbable that during the next few years it may again be- 
come the object of legislation. 

Most other countries have, at some period of their history, 
found it necessary to limit the rate of interest. In 1228 the rate 



206 INFLUENCE OF WAR AND PEACE ON THE FUNDS. 

was fixed at Verona at 12^ per cent, per annum. In 1242, James 
I., King of Aragon, fixed it at 18 per cent. In 1270 the legal 
rate at Modena was 20 per cent. There is an edict of Philip 
Augustus, near this period (1272), limiting the Jews in France 
to 48 per cent. ! In 1311 Philip IV. fixed the interest that might 
be legally exacted in the fairs of Champagne at 20 per cent. In 
1336 the Republic of Florence borrowed money of individuals 
upon an assignment of taxes at 15 per cent., "which appears to 
have been above the common rate of usury." In 1490, at Pia- 
cenza, the rate was as high as 40 per cent. In 1491 the first 
public sanction by the Popes to the payment of interest was 
given. In 1545 Charles V. fixed the rate in the Low Countries 
at 12 per cent. In 1586 a law was passed in Scotland fixing the 
legal rate at 10 per cent. In 1773 the rate was fixed in Ireland 
at 6 per cent, by 14th George III. In the United States the 
limit is 8 per cent. 

The limits fixed by legislative enactment offer no exact crite- 
rion of the rates actually existing in practice, although, they 
undoubtedly exercise some influence. The price of the Funds is 
perhaps the best criterion in this country, and has been taken as 
such by the most experienced writers. They (the public funds) 
indicate the abundance or scarcity of money — are affected by war 
and peace — by national prosperity or adversity. The Funds may 
be termed the national thermometer — they register our successes 
and our disasters, our prosperity and adversity, scarcity and 
plenty. As the price of the Funds goes down, the rate of interest 
rushes up. War and scarcity operate in this direction, and afford 
us another remarkable instance of the operation of the law T of 
compensation. War and famine accelerate the rate of mortality, 
but they also improve the rate of interest, so that it is probable 
Assurance Offices with large funds realize, under such conditions, 
as much by excess of interest on their investments as they lose 
by the excess of mortality in the shape of claims. 

Mr. Charles Babbage, in his Comparative View, says — " With 
the view of getting some approximation to the average rate of 
interest in this country, I have examined a period of 92 years of 
peace and war, commencing at 1731, and terminating at 1822. 
By extracting from the Tables collected and published by M. 
Caesar Moreau, the highest and lowest price of the three per 
cents, during each year, it appears that the average annual price 
was — 

73 1-10 (73-1) during 48 years of war. 

86 l-8th (86-14) during 44 years of peace. 

79 l-3rd (79*33) during 92 years of war and peace. 

These averages are deduced from the mean of the highest and 
lowest prices during the year ; more numerous observations 
might alter them a little, but they are sufficiently accurate for 
the present purpose. The rates of interest that these averages 
would indicate are-,— 



INFLUENCE OF WAR AND PEACE ON THE FUNDS. 20*7 

4 1-lOth (4*1) per cent, during war. 

3£ (3'48) " during peace. 

3f (3*78) " during war and peace. 

If it be considered that it is generally possible, without addi- 
tional risk, to make rather a higher rate of interest than that 
which is yielded by the 3 per cents., it seems reasonable to con- 
clude that 4 per cent, annually is about the rate of interest which 
an establishment calculated for any considerable duration may 
expect to make." 

In 1829, Mr. Finlaison wrote, " I take it for granted that it will 
be considered safe enough to assume that money in a long course 
of years, will so accumulate through all fluctuations as to equal a 
constant rate of 4 per cent., because in point of fact money has 
hitherto accumulated at 4^- per cent., whether we reckon from 
1803 or from 1783." 

Professor de Morgan, a little later, said, " assuming the neces- 
sity of calculating upon a rate of interest something less than that 
which can actually be attained, I should think that no Office would 
be justified in supposing more than 3 per cent., with Tables suffi- 
ciently high to come any way near to the actual experience of mor- 
tality" And in another place he says, the rate of interest as- 
sumed by Life ofiices should " never be above that at which the 
Government can borrow " — namely, that regulated by the price 
of the funds. 

Seeing the importance of the question, we have thought it de- 
sirable to give the following abstract from the third edition of 
Willich's excellent " popular Tables," showing the price of 3 per 
cent, consols, and the rate of interest realised upon every £100 
invested in them during a period of 125 years — from 1731 to 1856 
— also noting the existence of peace and war. 

The period at which the price of funds was the lowest, and the 
interest on every £100 invested in them therefore the highest, 
was in 1797 and 1798, the rates being respectively £5 155. 4d. and 
£5 145. per cent. This was in time of war. In 1781, 2 and 4, 
they were nearly as low, also in 1804. In each case we trace the 
influence of war. We can well understand, from a perusal of 
this Table, how some of the Assurance offices, started at the 
close of last or the commencement of this century, have amassed 
wealth. They invested their paid-up capital in the funds when 
they were nearly at the lowest ebb, and for half a century have 
been receiving a rate of interest greater than they could have 
made elsewhere with security, while the principal itself has be- 
come nearly doubled by the high prices at which the funds now 
remain, consequent upon the improved condition and increased 
wealth of the country. So permanent, indeed, is this improve- 
ment, that even during the war the variation, if we remember 
rightly, was never more than two or three per cent., while for- 
merly one year's warfare would bring down the fund some £10 
or £12;— vide 1792-3 and 1802-3, in the following Table. The 
highest price recorded was in 1737, in time of peace. 



208 



TABLE. 



TABLE 

Showing the average price of 3 per Cent. Consolidated Annuities, with the 
average rate of Interest, from 1731 to 1856. 



Peace or 


Year. 


Price of 


Average rate of 


Peace or 


Year. 


Price of 


Average rate of 


War. 


Consols. 


Interest p. c. 


War. 


Consols. 


Interest p. c. 






£ 


£ s. d. 




£ 


£ s. d. 




r 1731 


96 


3 2 6 




f 1794 


67% 


4 8 10 




1732 


98 


3 12 




1795 


65% 


4 11 3 




1733 


100 


3 




1796 


61% 


4 16 11 




1734 


92 


3 5 2 


War. ■ 


1797 


52 


5 15 4 


Peace- - 


1735 


95 


3 3 1 


1798 


52% 


5 14 




1736 


102 


2 18 9 




1799 


60% 


4 18 9 




1737 


106 


2 16 7 




1800 


63% 


4 14 3 




1738 


104 


2 17 8 




k 1801 


62% 


4 16 7 




» 1739 


101 


2 19 4 


Peace. ; -;:-;0 : 


72% 


4 2 9 




1740 


99 


3 7 




f 1803 


61% 


4 17 4 




1741 


95 


3 3 1 




1804 


56% 


5 6 8 




1742 


100 


3 




1805 


59% 


5 9 


War. - 


1743 


101 


2 19 4 




1806 


61% 


4 17 6 


1744 


94 


3 3 10 




1807 


61 


4 18 4 




1745 


89 


3 7 4 


War. ■ 


1808 


65% 


4 11 1 




1746 


82 


3 13 2 


1809 


66% 


4 9 8 




1747 


83 


3 12 3 




1810 


67% 


4 9 4 




^ 1748 


86 


3 9 9 




1811 


64% 


4 13 4 




1749 


98 


3 12 




1812 


59 


5 18 




1750 


100 


3 




1813 


61 


4 18 4 




1751 


100 


3 




1814 


67 


4 9 6 


Peace. - 


1752 


104 


2 17 8 




: 1815 


59% 


5 4 




1753 


104 


2 17 8 




1816 


62 


4 16 9 




1754 


103 


2 18 3 




1817 


73% 


4 2 




I 1755 


96 


3 2 6 




1818 


77% 


3 17 4 




f 1756 


89 


3 7 4 




1819 


71% 


4 3 5 




1757 


90 


3 6 8 




1820 


67% 


4 8 4 




1758 


92 


3 5 2 




1821 


73% 


4 14 


Wak. ■ 


1759 


83 


3 12 3 




1822 


79% 


3 15 10 


1760 


82 


3 13 2 




1823 


78% 


3 16 1 




1761 


79 


3 15 11 




1824 


90% 


3 6 1 




1762 


75 


4 




1825 


84% 


3 10 11 




= 1763 


89 


3 7 4 




1826 


79% 


3 15 10 




1764 


84 


3 11 5 




1827 


83% 


3 12 2 




1765 


88 


3 8 2 




1828 


84% 


3 10 11 




1766 


89 


3 7 4 




1829 


89% 


3 6 9 


Peace. 


1767 


89 


3 7 4 




1830 


85% 


3 9 10 




1768 


91 


3 5 11 




1831 


79% 


3 15 3 




1769 


88 


3 8 2 




1832 


83% 


3 11 9 




1770 


83 


3 12 3 


Peace. - 


1833 


87% 


3 8 4 




1771 


86 


3 9 9 


1834 


90% 


3 6 5 




1772 


83 


3 8 2 




1835 


91 


3 5 11 




, 1773 


87 


3 8 11 




1836 


89% 


3 7 1 




' 1774 


8S 


3 8 2 




1837 


90% 


3 6 




1775 


89 


3 7 4 




1838 


92% 


3 4 7 




1776 


84 


3 11 5 




1839 


91% 


3 5 7 




1777 


78 


3 16 11 




1840 


89% 


3 7 1 


War. ■ 


1778 


64 


4 13 8 




1841 


88% 


3 7 6 


1779 


61 


4 18 4 




1842 


91% 


3 5 4 




1780 


61 


4 18 4 




1843 


94% 


3 3 5 




1781 


58 


5 3 5 




1844 


98% 


3 8 




1782 


58 


5 3 5 




1845 


96% 


3 2 4 




1783 

' 1784 


64 


4 13 8 




1846 


95% 


3 2 10 




57 


5 5 3 




1847 


86% 


3 9 5 




1785 


60 


5 




1848 


85 


3 10 7 




1786 


74 


4 10 




1849 


93% 


3 4 4 




1787 


74 


4 10 




1850 


96% 


3 2 1 


Peace. - 


1783 


75 


4 




1851 


97% 


3 2 4 




1789 


76% 


3 18 6 




1852 


99% 


3 7 




1790 


75% 


3 19 3 




: 1853 


99% 


3 6 




1791 


82% 


3 12 6 


War. - 


1854 


92 


3 4 9 




. 1792 


84% 


3 10 9 


1855 


89% 


3 6 


Wak. 


1793 


75% 


3 19 2 




1856 


93% 


3 3 10 



RATES OF BANK DISCOUNTS. 209 

The price of funds does not, it is true, actually represent the 
rate of interest on other classes of investment, but it affords, over 
a series of years, a pretty fair criterion — operating like a pendu- 
lum, touching the extremes on either side, but always returning 
to the centre. In consequence, indeed, of the increased security 
of the funds over any other class of investment, it is generally 
understood that a slightly lower rate of interest is obtained. The 
rate of Bank Discounts, i. e., the rate at which the Bank of Eng- 
land will discount first-class mercantile bills, perhaps more nearly 
represents the current rate of interest in mercantile transactions 
than any other test. We may, therefore, just glance at these 
rates during the past century : — 

1746 Bank discounts, 4 per cent. No change till 1822. 

1822 June 20 — Bank discounts 5 per cent. 

1827 July 5— Reduced to 4. 

1836 July — Increased to 4| ; September, to 5. 

1838 February 15— Reduced to 4£. 

1839 May 16— Increased to 5 ; 20th June, 5$ ; 1st August, 6. 

1840 January 23 — Reduced to 5^ ; 25th October, to 5. 
1842 April 7— Reduced to 4 ; 1st September, to 3£. 

1844 September 5 — Further reduced to 2%. 

1845 October 16 — Increased to 3 ; 6th November, to 3£. 

1846 August 27— Reduced to 3. 

1847 Year of commercial distress — 14th January, increased to 3-£ ; 21st 

January, to 4 ; 8th April, to 5 ; 2nd August, to 6 ; 1st October, 
to 6& ; 25th October, to 8 ; 22nd November, reduced to 7 ; 2nd 
December, to 6 ; 23rd December, to 5. 

1848 January 27— Reduced to 4 ; June 15, to 3£ ; November 22, to 3. 

1849 November 22— Reduced to gf. 

1850 December 26 — Increased to 3. 

1852 January 1 — Reduced to 2£ ; April 22, further reduced to 2 (mini- 

mum). 

1853 January 6 — Increased to 2\- ; January 20, to 3 ; June 2, to 3£ ; Sep- 

tember 1, to 4 ; September 15, to 4-J ; and September 29, to 5. 

1854 May 11 — Increased to 5£ ; and August 3, reduced to 5. 

1855 April 5 — Reduced to 4£ ; May 3, to 4 ; and June 14, to 3^- ; Sep- 

tember 6, increased to 4 ; September 13, to 4£ ; September 27, to 
5 ; October 4, to 5| ; and October 18, to 6. 

1856 May 29 — Reduced to 5 ; and June 26, to 4J ; October 1, increased 

to 5 ; October 6, to 6 ; November 13, increased to 7 ; December 
4, reduced to 6i ; and December 18, to 6. 

1857 April 2 — Increased to 6£ ; June 18, reduced to 6 ; and July 16, to 

5i ; 8th October, increased to 6 ; October 12, to 7 ; October 19, 
to 8 ; November 4, to 9 ; November 9, to 10 [this is the first 
time in the history of the Bank that the rate has exceeded 8 per 
cent.] ; and December 24, to 8. 

1858 January 7 — Reduced to 6 ; January 14, to 5 ; January 28, to 4 

February 4, to 3£ ; February 11, to 3 ; December 9, to 2£. 

1859 April 28 — Increased to 3£ ; May 5, to 4£ ; June 3, reduced to 3£ 

June 9, to 3 ; July 14, to 2\. 

1860 January 19 — Increased to 3 ; January 31, to 4 ; March 29, to 4£ 

April 12, to 5 ; May 10, reduced to 4§- ; May 24, to 4 ; November 
8, increased to 4£ ; November 13, to 5 ; November 15, to 6 ; No- 
vember 29, reduced to 5 ; December 31, increased to 6. 

1861 January 7 — Increased to 7 ; February 14, to 8 ; March 20, reduced 

to 7 ; April 4, to 6 ; April 12, to 5 ; May 16, increased to 6 ; Au- 



210 THE PROBABLE FUTURE RATE OF INTEREST. 

gust 1, reduced to 5 ; August 15, to 4J ; August 29, to 4 ; Sep* 
tember 19, to 3£ ; November 7, to 3. 

1862 January 9— Reduced to 2| ; May 22, increased to 3 ; July 10, re- 

duced to 2£ ; July 27, to 2 ; October 3, increased to 3. 

1863 January 15 — Increased to 4 ; January 28, to 5 ; February 20, re- 

duced to 4 ; April 23, to Si ; April 30, to 3 ; May 16, increased 
to 3£ ; May 21, to 4 ; November 2, to 5 ; November 9, to 6 : De- 
cember 2, to 7 ; December 3, to 8 ; December 24, reduced to 7. 

1864 January 20 — Increased to 8 ; February 11, reduced to 7 ; February 

25, to 6 ; April 16, increased to 7 ; May 2, to 8 ; May 5, to 9 ; May 
19, reduced to 8 ; May 26, to 7 ; June 16, to 6 ; July 25, increased 
to 7 ; August 4, to 8 ; September 8, to 9 ; November 10, reduced 
to 8 ; November 24, to 7 ; December 15, to 6. 

1865 January 10 — Reduced to 5£ ; January 26, to 5 ; March. 4, to 4£ ; 

April 27, to 4 ; May 11, increased to 4J- ; May 25, reduced to 4 ; 
June 8, to 3£ ; June 20, to 3 ; August 5, increased to 4 ; Septem- 
ber 28, to 4i ; October 2, to 5 ; October 5, to 6 ; October 7, to 7 ; 
November 23, reduced to 6 ; December 28, increased to 7. 

1866 January 6 — Increased to 8 ; February 22, reduced to 7 ; March 15, 

to 6 ; May 3, increased to 7 ; May 8, to 8 ; May 11, to 9 ; May 
12, to 10 ; August 16, to 8 ; August 23, to 7 ; August 30, to 6 ; 
September 6, to 5 ; September 27, to 4£. 

Over a series of years the rate appears to have averaged about 
4 per cent., but it is to all appearance increasing. 

Most of the well-managed Life Offices, however, seek their 
more permanent investments in landed security. Here the rate 
of interest averages very little over that of the funds. At no 
time during the last 30 years have the funds given a return equal 
to 4 per cent., 3-| being about the average. 

The leading actuaries are pretty well agreed as to the probable 
rate of interest in this country for some years to come : or 
rather, perhaps, we should say they were in 1853, when a num- 
ber of them gave evidence before the Select Committee on As- 
surance Associations. Mr. Finlaison (late Government actuary) 
pointed out to the Committee that any estimate of this kind must 
be matter of conjecture ; the grounds depending more or less 
upon the experience and knowledge of the person conjecturing, 
but it was his own individual opinion that the rate of interest 
would be 3.J per cent, for the next forty years. Mr. J. J. Downes, 
actuary to the Economic Office, was of opinion that it was " quite 
safe to reckon upon 3^- per cent."* He had found the average 
price of consols for the last 25 years to be such as to yield 3^ 
per cent., viz. about 92. He used 3| per cent, in his valuation, 
but added this qualification, that " occasions occur every five 
years to compensate for any loss of interest that might be ex- 
perienced in the period," referring, of course, to the periodic 
valuations of assets and liabilities. He does not appear to have 
had to take advantage of these occasions, for he adds, " We have 
always made more than 4 per cent." As an instance of the 
importance of fixing upon a proper rate of interest, he stated that 

* In the quinquesimal report of the Economic ending in 1858, it is stated that the Invested 
Capital had produced an average Interest of 4J£ per cent. — Note, 1866. 



FIXING RATE OF INTEREST IN SCOTLAND. 211 

the " difference of a half per cent, in the rate of interest would 
make a difference of about 5 per cent, in the valuation of the lia- 
bilities of an Office at any one time ! Mr. T. R. Edmonds, actuary 
to the Legal and General Office, added that " if the Government 
securities yield 3 per cent., it may be expected generally that the 
interest of Assurance Offices from good investments would be 2>\ 
per cent.," and experience confirms this view as about correct. 
Mr. Charles Ansell, (of the Atlas Office,) stated that he had almost 
uniformly used the rare of 3 per cent. only. And Mr. W. T. 
Thomson, (of the Standard and Colonial,) stated that 3 per cent, 
was the rate generally used in computations in Scotland. 
An able writer in Chambers' Information, indeed, says : — " 

" It appears, from the published report of the Edinburgh Life Assurance 
Company, dated December, 1838, that for the three preceding years (1836, 
1837, and 1838, when interest was unusually low), the average rate realised 
on their funds was £4 16s. 6d. per cent. — about \\ per cent, higher than the 
return from the 3 per cents, during the same time. And this, it is stated, was 
obtained without any part being laid out in the purchase of reversions — on 
which, it is known, a much higher rate can be got. The example of this Of- 
fice is quoted merely from the circumstance of their report happening to state 
the precise return at that period. Other Scottish Oifices are said to have ob- 
tained a higher rate. Most of them state that their funds are invested ( about,' 
' at,' or ' above,' 5 per cent. Indeed it is not conceivable that the Offices could 
make such large returns to proprietors and members, in the shape of divi- 
dends and bonuses, if they did not generally improve money at about the rate 
last mentioned. From all these circumstances, it does not appear likely that 
calculations for Life Assurance, in which the interest of money is assumed at 
an average of four per cent., will, while Britain remains in nearly its present 
condition, prove unsound." 

It may be noted as peculiar to Scotland, that the rate of inter- 
est to be required on landed securities is there fixed every three 
or six months by the trustees of a fund established as a provision 
for the widows of ministers of the Church of Scotland ; the trus- 
tees of the Writers to the Signet Widows' Fund, and other parties 
who are largely interested in pecuniary transactions, who meet to- 
gether periodically for that purpose. This places great power in 
the hands of the lenders, and while conducted, as it hitherto has 
been, with fairness, is not prejudicial to borrowers, as they may 
always know before-hand the rate of interest they will be expected 
to pay. The rates of interest received on the first-named fund, 
from 1784 down to 1816, was 4|- per cent.; for the next seven 
years it was 5 per cent. From 1824 to 1826 it fell to 4 per cent., 
rising the two following years to 5, and falling in 1830-1 to 3-J, 
which appears to be the lowest rate ever yet received at any 
period. From 1847 to 1849 it rose to 5, and in 1853 (the last date 
we have) stood at 3£. The interest on the second-named fund 
was in 1822 (the first date recorded) 5 per cent., and the same 
from 1826 to 1828, having fallen to 4 in the interim. In 1830-1 it 
is down to 3. From 1847 to 1849 it stands at 5, and in 1853 at 3|. 
The average rate for landed securities in Scotland being for 37 
years since 1816, £4 4s. per cent., and for 19 years since 1834, £3 



212 FIXING RATE OP INTEREST IN SCOTLAND. 

16s. per cent. Mr. Thomson remarked to the Committee that 
Life Offices have many other modes of investment, to enable them 
to keep up the rate of interest " to one, or at least a half per cent, 
above the rate of heritable (landed) securities." These are points 
of very great importance to Life Offices, and hardly less so to as- 
surers if they take the trouble to understand them. 



CHAPTER IV. 

FOLLOWING OUT THE PRACTICE OF LIFE ASSURANCE. 

We may fairly, now, assume the reader to be pretty familiar 
with the groundwork on which the practice, as well as the theory, 
of Life Assurance is based. The two fundamental elements in 
practice — the rate of mortality, and the rate of interest, we shall 
consider as settled. The English Mortality Table we take as our 
standard in the one case, although we deem the Carlisle Table 
equally safe under sound management ; and, in the other, Three 
per Cent. Interest, as being justified by past experience, and as 
not likely to be much affected, at least, for many years to come. 
Except when otherwise stated, therefore, these will be our data 
in farther examples and comparisons. 

We now propose to follow out the practice of Life Assurance in 
this country, noting the gradual introduction of the various sys- 
tems or principles. 

We well know that this branch of our subject is fenced round 
by so many interests, and watched over with such great official 
jealousy, that we shall require to travel over some space to do 
justice to all the former, and to exercise some caution to avoid 
coming in unpleasant contact with the latter; but as we have no 
cause to serve save the truth, and are in no way tied down to ad- 
vocate any particular office or principle, we proceed to our task. 

Our first step will be to classify the Offices, as far as possible, 
so as to speak of them in relation to the principles of their con- 
stitution, rather than individually. All the existing Offices (with 
the exception of one or two, which will be specifically noted) may 
be ranged under the following three classes : — 

Mutual. 

Proprietary. 

Mixed. 

It is not difficult to see how these distinctions originated, and 
how they came to be adopted in the order in which they are ar- 
ranged. In early days, when the rude idea of Life Assurance was 
in the first stages of development, no data existed for determining 
the premium to be paid for any given sum payable at the death of 
the several members. A rate of payment had to be assumed, 
which all who associated in the scheme agreed to pay ; age, as we 
have already seen, originally not being taken into account, except 
at the extremes ; they were each to have a share in the common 
fund, disposable for the benefit of their personal representatives, 
on the occasion of their decease. Those who died early had their 
full share of the funds. Those who died later had to take their 



214 ORIGIN OF THE SEVERAL SYSTEMS OF ASSURANCE. 

chance. If the fund was more than usually successful a division 
took place during the lifetime of the majority of the members. 
The members of the early Societies were always anxious for a 
division of the funds. Even in the old Equitable, at a period much 
later than that of which we are now speaking, the same spirit was 
manifested, and the Society more than once endangered thereby. 
In the case of this Society, however, the promptings of Mammon 
were fortunately repressed by the strong rebukes and convincing 
arguments of its able actuary, Mr. Morgan. In many of the early 
Societies the uncertainty of receiving the sum assured at death 
was only equalled by the uncertainty of the period of that catas- 
trophe. It may be called, indeed, the "pot-luck" system. If the 
members did not get what they paid for, they took what they 
could get, as long as the funds lasted. Over and over again was 
the voice of warning held out to many of them, but to little pur- 
pose.* The promoters of the Amicable — the oldest of our exist- 
ing Offices — introduced a modified, if not improved, system. 
They fixed each member's share in the general funds at a sum of 
not less than two hundred pounds at death. The rate of contribu- 
tion was the same at all ages from 12 to 45, and the greater part 
of the fund of each year was divided amongst the representatives 
of those who died within the year. 

Societies thus conceived and carried out could not be otherwise 
than Mutual : no element of certainty had yet been introduced to 
render them attractive as trading speculations. A later period, of 
which the foundation of the Equitable Society marks the commence- 
ment, furnished data, and placed the business of Life Assurance on 
a more certain footing. Still the Mutual system was preferred, 
and was undoubted^ best suited to the times. Of the Mutual 
Societies formed, however, on this improved data, the first alone 
remains in existence. The others have passed away, as indeed 
must the Equitable, but for the wisdom which directed its early 
councils. The Amicable, in process of time, improved its consti- 
tution, and still remains secure in its antiquity. At later periods, 
other Mutual Societies have been formed, and for the most part 
their operations have been attended with considerable success. 

As soon however as sufficient data had been obtained "and the 
decrement of human life came to be reduced to a simple mathe- 
matical problem," so that the mutual societies could be conducted 
on something like a sound footing, the business became sufficiently 
secure for trading purposes. The public, too, in many instances, 
had lost money by the ill-founded mutual schemes, and were glad 
to obtain the element of security at almost any cost : hence most 
of the existing Companies of the last century were founded on the 
proprietary system — viz., that in consideration of the annual pre- 
mium paid by the person assured, the proprietors of the office — 
the directors and shareholders — guarantee to pay a certain fixed 
sum on the death (or other event provided for in the contract) of 

* Vide the works of Dr. Price and Francis Baily. 



ORIGIN OF THE " MIXED " SYSTEM. 215 

the person so assured. The assured were exempted from all risk 
— they were neither to participate in the profit nor in the loss. 
They paid a fixed sum for a definite object, and that must be ac- 
complished either out of the funds of the Company, or the pockets 
of the shareholders. These were indeed real trading concerns, 
selling assurance and insurance policies as a tradesman sells any 
other commodity : with this difference always to be remembered, 
that as the fulfilment of a contract under a life policy may possi- 
bly be deferred many years, the purchaser musl look to the honor 
and pecuniary responsibility of the person with whom he deals. 
A popular writer speaks of this plan as very suitable to the time ; 
and as to the very early companies he is correct in saying, that 
" life assurance business was as much a matter of speculation 
as would be a transaction in hops or foreign wheat at the present 
day." 

Early in the present century several causes combined to produce 
a reactionary feeling. The disasters attending some of the earlier 
mutual schemes — we cannot call them societies — were unknown to 
the new generation which had sprung up. Further investigations 
into the law of mortality had shown that the rates of premium then 
charged were too high for the risk incurred ; and the Equitable 
Society, then rising to the height of its fame, was beginning to dis- 
tribute very large profits to its members. All these causes com- 
bined to produce the reactionary feeling, which about this time 
showed itself in favor of the mutual principle — the last probably 
far more than either of the others. What was to be done ? The 
proprietary companies could not suddenly transmute themselves 
into mutual ones. Many of them had large sums of money, which 
had been paid up by the shareholders to guarantee the liabilities 
incurred in the earlier years. It would have been unfair, now that 
the Companies were beginning to pay, to cut off the profits which 
the proprietors were entitled to for the risks they had run : besides 
some of the Companies had paid large sums of money to the Gov- 
ernment for the charters under which they transacted their busi- 
ness. If a number of new mutual societies had been started, the 
effects of competition might have led them into errors no less fatal 
than those which had resulted from the ignorance of a previous age. 
Again we ask, what was to be done ? If necessity be indeed the 
mother of invention, could she not give birth to an invention suited 
to the circumstances of the present case? She did so ! A happy 
thought blended the two systems} and that which we now call the 
mixed principle was the result. 

The Mixed principle, as its name would imply, combines the 
advantages of both the mutual and the proprietary offices. Com- 
panies formed on this principle have a sufficient paid-up capital to 
protect the early assurers from loss, and to meet the formation and 
management expenses without entrenching upon the necessary re- 
serve funds. In consideration of this a portion of the profits — gen- 
erally only a small portion — is awarded to the proprietors or share- 



216 THE VEXED QUESTION IN LIFE ASSURANCE. 

holders, the remainder going to the assured, as in the mutual of- 
fices. The British Commercial was the first office founded on the 
mixed principle. This was in 1820. The plan rapidly grew into 
favor. The old Proprietary Companies have modified their con- 
stitutions, and are working upon the mixed system. The greater 
part of the new offices have adopted it ; and as we have already 
said, the proportion of mixed to mutual offices is as 5 to 1 ; while 
of the proprietary offices only one or two now exist. 

It requires some courage to say that we contemplate inves- 
tigating the claims and advantages of these systems. The 
proprietary system is not without its advocates, or without its 
uses ; but the main points of comparison lie between the other 
two. Every science is said to have its vexata qncestio, its vexed 
question, why not that of life assurance ? This is it : — which 
offers the greater advantages to the assured, taking all circum- 
stances into account ? Nearly every writer, since the mixed 
principle has been introduced, has waged war on one side or the 
other. We do not intend to make a personal question of it. 
Our object will be fully answered if the reader gleans enough of 
the merits of each to draw his own conclusion. We shall, there- 
fore, as far as practicable, leave the " great guns " to fight it out, 
retiring., like a general mindful of his personal safety, until the 
heat of the battle subsides. 

A writer in the North British Review (Nov. 1849), from his 
impartiality, seems well qualified to marshal the opposing forces. 
He hardly keeps up the necessary distinction between absolutely 
proprietary offices and the mixed ones, but the context affords 
the clue : — 

" The Proprietary Companies were, in the early times of Life Assurance, in 
the habit of appropriating the whole profits, by which the shareholders were 
greatly enriched. The Mutual Offices, more especially those instituted during 
the present century, have, by their vigorous competition for business, given a 

check to this monopolizing system What competition has forced 

them (the Proprietary Companies) to adopt as a necessity, equity confirms 
and demands as a right ; and any Proprietary Company which henceforth 
shall attempt to appropriate the profits, or a large part of them, to the share- 
holders, will, we doubt not, find, as they ought,, that they are behind the 
market, and must either better their terms or shut their doors. The Mutual 
Societies have thus established a strong claim on the gratitude of the com- 
munity, their correction of the abuses of the proprietary system having given 
them great acceptance with the public. Still the proprietary system (as 
exhibited in the " Mixed" Offices) prevails in point of extent, and if liberally 
carried out, possesses great advantages. The allocation of large bonuses upon the 
capital stock is as indefensible in principle as it must henceforth be short- 
sighted in policy ; — but supposing such practices to be finally abandoned, ice 
should say, that so far as the mere element of construction is concerned, the 
proprietary form is best. . . . Our reasons for preferring the proprietary 
constitution (apart from the guarantee afforded by the subscribed capital) are, 
that it possesses several advantages in the practical working of its affairs, 
which a Mutual Society cannot command. The Directors (representing the 
shareholders principally) are more likely to act impartially in the distribution 
of the surplus fund among the policy-holders than the Directors of a Mutual 
Society, who generally represent the old policy-holders, the powerful and ruling 



KELATIVE ADVANTAGES DISCUSSED. 21/ 

class in all such Associations. A Proprietary Company can modify and vary 
the rates according to advancing information, or their own experience, or change 
of circumstances. A Mutual Society, on the other hand, cannot pass from an 
erroneous to a correct system of contribution. If they have begun upon a 
wrong Table they must persevere in the face of all reason and conviction. A 
large number of members come, at a certain point, to have a substantial and 
annually increasing interest in the maintenance of the erroneous hypothesis. 
Of course their rights under the deed of settlement are indefeasible, and so the 
only remedy for the evil is the forlorn one of a felo de se. The Society can 
get quit of its erroneous scale of contribution by winding up, and not other- 
wise." 

It does not always follow that a Mutual Society will be unable 
to correct abuses which may have crept in, although in some well- 
known instances it has proved so ; but the constitutions of 
modern mutual offices have been so framed as to avoid some of 
the evils which were found to beset the earlier ones. In the follow- 
ing remarks from the same pen all will concur : — 

" Under the proprietary form the non-participating rates may be most 
largely diminished. We doubt if the advantages which they possess in this 
respect are sufficiently appreciated either by themselves or the public. It will 
perhaps come more into view in succeeding years, as one of the methods of 
obviating in part the difficulties of meeting the premiums which recently 
have produced so very large an amount of surrendered and forfeited policies. 
It seems pretty clear that a set of proprietors can with more safety sell assur- 
ance at a price which will barely remunerate them, than a Society whose 
solvency depends on the calculations proving adequate, and which ought, 
therefore, in all cases, to charge rates undoubtedly sufficient." 

Professor de Morgan (whom we are always glad to quote as an 
authority) is equally impartial. He says — 

" A very common security or guarantee to the public, is the announcement 
of a large subscribed capital, either paid up in whole or in part, or liable to be 
called for. This is equivalent to th* 3 ' ersonal security of a number of share- 
holders collectively making themse I answerable for the engagements of 
the Office up to a certain amount i a provision is in itself an obvious good ; 

but it being remembered that «s su rity must be paid for, it becomes a 

question how much it is worth, and whb ;her it may not be bought at too high 
a price." 

The conclusion he comes to is this : 

" Now I take it for granted, that an Office charging premiums such as are 
commonly demanded, managed with prudence and economy, and successful in 
obtaining business, will not ultimately need any capital at all : first, because 
the premiums are such as must, in the long run, realize a profit, after paying 
the expenses of management, so that the only use of capital would be as a 
provision against extraordinary temporary fluctuation ; secondly, because a 
sufficient supply of business renders the probability of ruinous fluctuation 
extremely small, and altogether beneath consideration. Now, since it is well 
known that the premiums are sufficient, it follows that the only need which a 
commencing Insurance Office has of capital, is for safeguard against the early 
expenses of management, and against failure of business." 

In like manner Mr. Samuel Brown, with his usual clearness of 
views and expression, points out that the capital of Proprietary 



218 THE ADVOCATES OF THE MUTUAL QUESTION. 

Companies is chiefly useful in " giving conscience to the assurer, 
that the engagement made with him by the Company will be 
faithfully fulfilled, and that if the premiums already received, laid 
out at interest, be not sufficient to afford payment of his claim, 
he shall have this additional security, on which he may rely." 
He adds, "it may not be out of place here to remark, that it is a 
well-constituted Proprietary Office, where the premiums are ade- 
quate in themselves to cover the ordinary risks. The greatest 
peril which the proprietors incur is in the early infancy of the 
Company."* 

A writer in the Morning Herald during the " assurance con- 
troversy," referring to the subject of capital, took this view of 
the question : — 

" It is moreover a great error to judge of the safety or security of any 
Life Office by the amount of its paid-up Capital, for the Mutual Societies have 
no capital at all, yet most of them are sound and flourishing. In reality, the 
more moderate the paid-up capital, provided it be sufficient to secure the foun- 
dation on a sound basis, the more the profit to assurers who participate in the 
returns. Large capitals may command confidence, but the charge thereon 
necessarily reduces the profits to be divided." 

And, speaking on the position and prospects of Insurance 
Offices generally, but overlooking the fact that excessive expen- 
diture is frequently a cause of failure, as well as " want of 
business," he expressed his opinion that — 

" Any possible injury to assured parties by the failure of such Societies must 
be of limited extent ; first, because the liabilities would, under such circum- 
stances, be limited, the failure being only from want of business ; and, second- 
ly, because, in the Proprietary or Mixed Insti tutions all such losses would 
have to be defrayed by the Shareholders, leaving only the insured in the purely 
Mutual Societies exposed to any such .hazard, and they are generally protec- 
ted by higher rates of premium, which fact, are capitals in disguise." 

The preceding writers have c^ , -n fencing about the ques- 
tion, but now comes the "tug if war." Mr. Sturrock is one of 
the fiercest combatants in support of mutuality. The Mutual 
Offices, he says, have no proprietors for whose profit a portion of 
the premiums payable by the assured is taken away. And he 
continues : — 

" The object of these Societies is to retain among the members themselves 
the whole benefits arising from their premiums. It is plain that by this me- 
thod alone the public can derive the entire advantages which the present 
knowledge of the science of Life Assurance can confer. That knowledge 
enables men of integrity and intelligence to give the community every profit 
which can possibly arise from Life Assurance. If any cavil can be made about 
the rate of premiums, none can be possibly made about the just appropriation 
of the accumulations, until it can be proved that it is more beneficial for the 
assured to take a part, rather titan the whole, of the bonuses and surpluses." 

A writer in Chambers's Journal — where some excellent articles 

* Thoughts on Life Assurance, IS49. 



FEESH AUTHORITIES ADDUCED. 219 

on Life Assurance from time to time appear — exhibits equal met- 
tle :— 

" The leading pretext of the Proprietary system is, that the subscribed capi- 
tal affords a guarantee or security for the payment of claims, which the Mutual 
System lacks, and that the assured is thus compensated in safety for what he 
wants in money. But the hollowness of this pleading is seen in a moment, 
when we consider that a combination of assurers, each paying fully what sci- 
ence says is necessary to make good their mutual engagements, is a trans- 
action free from all risk, in the ordinary sense of the word, and only can fail 
in the event of a change in the laws of nature, or such an alteration in the 
condition of the country (affecting the value of money,) as no kind of security 
would gainstand " 

Another writer in the same quarter includes Mutual Assurance 
" pure and undefiled " in his moral code : — 

" The system of Mutual Assurance — pure and undefiled — is that which the 
public should for its own sake, and partly for the sake of morality also, sup- 
port. It is an institution contemplating unmixed good to mankind, and where 
no grosser interests than those of a few officials can possibly be maintained." 

Mr. Pocock, evidently believing the better part of valor to be 
discretion, contents himself with presenting the outline of the 
working of a Mutual Society, more particularly with respect to 
the extent of liability incurred by the members : — 

" If a Mutual Assurance Institution consists of 1,000 members assured for 
^1,000 each, every policy-holder is the assurer of l-999th (one nine-hundred 
and ninety-ninth) part of .£999,000, whilst he is himself assured for ,£1,000 by 
999 other members. As the annual premiums are invariably paid in advance, 
if they be all computed for the whole term of life, the aggregate amount of 
such premiums will be more than double the sum requisite to provide for the 
claims, during several years ; the annual premium for the whole term of life 
being on an average double the rate required for seven or even more years. 
Consequently, except in the event of such an extraordinary combination of 
adverse circumstances as would produce an extent of claims greater than dou- 
ble the probable amount, the fund accumulated from the premiums must for 
many years be always sufficient to provide for the claims without resorting to 
a call upon the members. Hence, if (as is always the case in fact) the number 
of policy-holders which would otherwise gradually diminish, be continually 
recruited by new members, it is scarcely within the limits of probability that 
any actual deficiency of funds should take place, or any call upon the mem- 
bers be required. If, again, a sufficient profit or per centage be added to the 
rates so as to yield a probable surplus, after providing for the claims and ex- 
penses, and an adequate portion of such surplus be always reserved, after the 
affairs of the Society shall (at periods neither too frequent nor too far distant 
from each other) have been accurately ascertained by strict mathematical in- 
vestigation, then there will be a continually accumulating surplus fund, which, 
if the concerns of the Society be properly administered, will always be suffi- 
cient to provide for any extraordinary combination of adverse events, without 
requiring any call upon the members, or, indeed, exposing them to more than 
the mere liability to such call." 

The author of Principles and Practice of Life Assurance gives 
credit to Proprietary Companies, for having done good service in 
their day and generation. He says, "When Proprietary Compa- 
nies were first established, shortly after the beginning of last 



220 FEESH AUTHORITIES ADDUCED. 

century, the risks of Life Assurance were very imperfectly known ; 
and it was natural and necessary that the premiums demanded 
should be more than sufficient to meet the claims on the Com- 
pany. These Offices were created by the merchants of London ; 
and they were so wise as to found them with the view of prevent- 
ing any loss occurring to them as proprietors. In ignorance of 
the results of Life Assurance no other plan could be followed?'' 
But he now contends, "After the long and accurate experience of 
Life Assurance, the existence of Proprietary Companies is one of 
the perplexing anomalies of the present day. They are Institu- 
tions in which the merchants and traders of this country transact 
business on principles the reverse of those they folloio everyiohere 
else. They show a singular disregard for the true value of their 
money, when they voluntarily seek the expensive benefits of Pro- 
prietary Offices, while they could obtain their objects elsewhere 
at less expense." These latter remarks only apply to Proprietary 
Offices charging rates of premium as high as respectably-con- 
ducted Mixed or Mutual Offices, which in several Proprietary 
Offices is still the case. 

Mr. M'Culloch has his doubts whether the advantages of Mu- 
tual Assurance Companies are not more than balanced by the 
disadvantages incident to such establishments ; " from the consi- 
deration that every one being a partner in the concern has not 
only his own life insured, but is part insurer of the lives of all 
other members ; and may, in this capacity, should the affairs of 
the Society get into disorder, incur some very serious responsi- 
bilities." 

Mr. Erith comes boldly forward in behalf of the Mixed Offi- 
ces : — * 

" The Mixed plan of Life Assurance," lie says, " not only offers every secu- 
rity to the assuring public, but any villainy in the formation of a Company 
under its auspices is more easily detected than under the Mutual scheme. It 
is most consistent with common justice ; because whilst- shareholders are 
rightly remunerated for their advance of capital as security, policy-holders 
share in the profits of the concern as the fitting reward of their support of 
that security ; and thus each rewards the other upon mutual terms." 

Mr. Hillman takes the same view of the superiority of Mixed 
Companies. He says : — 

" Those who divide the largest portion (of profit) are about as valuable as 
the Mutual. As there is a possibility of an office, by a series of losses or indis- 
creet management, becoming insolvent, there is certainly an advantage (which 
however should not be purchased too dearly) in having another fund to fall 
back upon to enable it to meet its liabilities." 

Mr. George Isabel Soper, in his clever little pamphlet, also 
lends to the Mixed Companies his indirect support : — 

" The promised advantage in Mutual Offices is the return of all profits, 
among all assurers proportionately, and the principle in that sense undoubt- 
edly has strong recommendations, though we believe it is rarely, if ever, car- 

* Stray Thoughts on Life Assurance. 



THE DISCUSSION CONCLUDED. 221 

ried fully out in its strict interpretation. Almost all the Mutual Associations 
have a reserved, or what goes by the name of a guarantee, fund, which in fact 
is nothing more nor less than a subscribed or pledged capital raised from ad- 
vanced premiums. Any one may be satisfied of this, who will take the trouble 
to compare the premium scales of the Mutual with those of the Proprietary 
Offices. He will find a very material difference, the Mutual offices ranging in 
general from 15 to 20 and 25 per cent, higher than the average proprietary 
(Mixed) scales, and that addition alone ensures a large profit of course, or 
large returns in the name of profit, though they are really and truly surplus 
charges so returned. It would be folly to attempt to disguise such a plain mat- 
ter of fact. Such advanced rates are distinctly supported on the ground of the 
propriety of providing for possible contingencies. It may therefore be rightly 
considered as a voluntary admission that responsibility of some sort in the 
management, and a real or available capital, are good recommendations. _ Is 
it not, in fact, an argument in favor of personal identity, and personal liability, 
or some such provident provision for possible contingencies ? If that question 
be answered in the affirmative, the conviction would naturally lead to an ap- 
proval of those offices, which unite the two leading principles (the Mutual and 

Proprietary) in one common interest and responsibility Moreover, 

it is but fair to state, that such participating advantages in the combined offi- 
ces, do not involve the mutual assurers in any of the proprietary responsibi- 
lities. This fact should be clearly understood, for the contrary has been repre- 
sented in some publications and prospectuses which we have seen." 

Mr. Sturrock, to whom we must once more refer, is not disposed 
to allow the advocates of the Mixed principle to have things all 
their own way. He says : — 

" In entering a Mixed Society the assured confessedly joins a scheme, where 
he is told he will have the protection of a large capital, while he is at the 
same instant informed that the rates will suffice to allow him to participate in 
three-fourths, or four-fifths, or other portion of the profits of the Society. If 
Proprietary offices manage to conceal the absurdities of their announcements, 
the contradiction is here too apparent to avoid detection .... It would not, 
(he concludes,) be difficult to show that this capital, instead of being a protec- 
tion, is in reality in many cases a very serious burden. If any one will take 
the trouble of calculating he will find that after a very short time, as compared 
with the expected duration of an Assurance Office — perhaps not longer than 
some of the Scotch Offices have already existed — the accumulated dividends 
paid out of the premiums to the shareholders will have abstracted a greater 
sum than the capital itself, which they profess to provide for the security of 
the assured ! It is clear that the Mutual office having no such dividends to 
pay, has preserved to its members an amount equal to such capital, and which 
will not, like the other, operate every year as a further drain on the resources 
of the Society." 

Let us pause here, and ask if this outlay of ammunition — of 
paper, ink, and type — is paid for in the result ? We think it is. 
The reader now has before him the whole case. 



CHAPTER V. 

CAPITAL, AND ITS USES. 

Among the authorities quoted in the preceding Chapter, such 
a diversity of notions prevails with regard to the advantages or 
otherwise of capital, that the subject appears deserving of more 
minute consideration. Here, as on most other points of practice, 
much is to be learned by attentively studying all sides of the 
question. Greater unanimity prevails as to the importance of 
capital to young Companies, than on many other points : with 
respect to the older Offices, transacting Life business only, the 
use of capital becomes more doubtful. Commencing with Adam 
Smith, who wrote as a political economist, and not as an actuary, 
he says {Wealth of Nations, 5th edit., p. 146), "The trade of 
Insurance gives great security to the fortunes of private people, 
and by dividing among a great many that loss which would ruin 
an individual, makes it fall light and easy apon the whole Society. 
In order to give the security, however, it is necessary that the 
insurers should have a very large capital.'''' 

Mr. Charles Babbage will be held as a competent authority on 
the other side. He says, " since the fluctuation in the price of 
life, arising from the natural uncertainty of its duration, is consi- 
derably less than that which occurs in the price of most com- 
modities, a person who deals in securities dependent on lives, 
requires less capital to carry on his business than one who trades to 
an equal exte?it in any other species of merchandize" 

Neither of these writers fully reach the point. Coming to the 
more modern writers, " capital is required," says Mr. Pocock, " to 
equalize fluctuations to which Assurance Companies are liable, 
and which must be expected, from time to time to occur," " as 
well," adds Mr. Swiney, "as for the purpose of defraying the 
extraordinary expenses of the first few years' management, whilst 
the natural resources of the Institution are being developed." 
Mr. Neison has expressed similar views, adding, " I shall never 
myself attempt to establish such an Institution without some 
capital." Mr. Win. Thos. Thomson, when interrogated by the 
Select Committee on Assurance Associations thus : — " You con- 
sider some paid-up capital, both in the case of Proprietary Offices 
and Mutual Offices, absolutely necessary for the purpose of defray- 
ing the preliminary expenses and early contingencies of the 
Office?" answered emphatically, "I do!" Mr. Samuel Ingall 
was asked by the same committee, " Do you think that a paid-up 
capital, in the first instance, is indispensable to the safe establish- 
ment of Assurance Offices ?" and replied, " Quite indispensable in 



THE USES OF CAPITAL DISCUSSED. 223 

my opinion." Mr. E. J. Farren considers the necessity for capital 
" implied by the very nature of Assurance calculations" 

Touching what the amount of capital should be, Mr. Finlaison 
says, " No great capital is necessary to set a-going a Life Office, 
if honestly conducted, and if the expense of management is pru- 
dently kept down." He adds, however, "It is plain that the 
management of a Life Office upon an extensive scale, which entails 
at the present day an immense amount of advertisement, cannot 
be conducted very cheaply ; and the funds necessary for that pur- 
pose cannot come out of the premiums which are calculated to 
meet the claims upon the policy." Mr. Charles Ansell says, " For 
all purposes of Life Assurance a large capitcd is certainly 7iot 
necessary" Also adding, that "the main reason which I should 
have for suggesting the requirement of capital is, that it appears 
to me to be the only test for the position in society occupied by 
those who found such important institutions." In this latter view 
several others join. Mr. Charles Jellicoe would propose a paid-up 
capital, as a test of the bona fide intentions of the parties en- 
gaging in the undertaking "in the first place, and as some guar- 
antee throughout the existence of the Company." And Mr. 
Samuel Ingall, to the following question — " Is it your opinion that 
it is absolutely necessary, as a test of the bona fide intentions of 
the parties commencing Assurance Offices, that they should be 
called upon to pay up a certain sum of money of their own, and 
which would be at stake upon the failure or success of the 
Society?" — answered, " That is my decided opinion" Mr. High- 
am asserted this to be the " only ground on which he would ask 
to have it made a legislative enactment." Adding, however, " as 
a matter of opinion, I think it highly desirable to have a proprie- 
tary subscribed capital." "Take what amount of precaution we 
may (says another popular writer), an Office must, at first starts 
ing, depend upon something either of capital or guarantee. Even 
a Mutual Office must raise something at the start."* 

It was strictly in accordance with these views that the Parlia- 
mentary Committee referred to, stated in their report (after hear- 
ing the evidence of many of the above-named witnesses, and some 
on the other side of the question), their opinion — 

" That in the interest of the Companies themselves, as well as in that of the 
public, it is desirable to interpose such checks as will give a reasonable guar- 
antee as to the bona-fide intentions of the promoters of such Companies. To 
this extent only the committee are of opinion that any interference at this 
stage is desirable. With this view in addition to such regulations as may be 
considered needful for the purposes of registration, the committee are of opin- 
ion that no new Company should be admitted to complete registration until a 
capital shall have been subscribed and actually paid up of at least £10,000, 
and which shall be invested in the public funds, under such regulations as 
parliament may deem fit to exact ; to be considered in the double light of a 
test of bona-fide intentions on the part of the promoters, and of a security for 
the liabilities of the Company at its early stage of existence." (Clause 12, 
sec. 4.) 

* National Cyclopaedia : Art., Life Assurance. 



224 CONFLICTING AUTHORITIES ON THE USES OF CAPITAL. 

On the other side of the question came those who aver capital to 
be altogether unnecessary. These are the advocates of the purely 
Mutual Offices. They declared capital to be " a mere stalking- 
horse," and that " there is no instance of its ever being called into 
requisition." This was written several years since, or the writer 
would have been acquainted with the fact that an Office estab- 
lished in 1824 has very recently been compelled to make a call of 
£75 per share to meet deficiencies in its funds, £25 per share only 
having been previously paid. " Were such an instance to occur," 
continues the same writer, "the capital would probably have been 
a mere trifle in comparison with the extent of the obligation." In 
the case referred to, we believe the un-called capital was sufficient 
to meet the entire deficiencies : at all events, it was sufficient to 
save the Office from absolute bankruptcy, and its policy-holders 
from loss. But this writer adds : — 

" We may go further, and say, that this capital is not only unnecessary, in 
consequence of the unavoidable formation of large funds from the mere pay- 
ments of the assured, but, if on a large scale, it would be a positive disadvan- 
tage, as, if there is any real difficulty in the conducting of Life Assurance 
business, it is in the disposal of the funds. Capital for Life Assurance can, at 
the most, only be needed at first, while the accumulated premiums of the as- 
sured are of slender amount ; but, admitting that it is ever so needed, it almost 
immediately becomes superfluous, and should be therefore withdrawn."* 

Few of the other mutual writers have gone so far. Mr. E. 
Kyley contents himself by saying, " The introduction of capital 
into Assurance Offices has been the source of a great deal of harm, 
although (he adds) of a great deal of benefit also." Mr. S. Brown's 
chief objection to capital is, that the less it is in danger, or the 
more secure the shareholders are from calls, the more they obtain 
for its nominal use." The Messrs. Chambers, who (through their 
publications) have been the most strenuous advocates of mu- 
tuality, have of late considerably modified their tone. In an 
article in their journal, in July, 1855, they offer the following 
judicious remarks : — 

" In olden times the starting of a new Life Assurance Office was a rare and 
notable event. During the last ten years they have sprang up in scores. It 
seems all fair, as only in accordance with our views of unrestricted competi- 
tion. Grant this. There is nevertheless so small a proportion of sound busi- 
ness for each, that the receipts of the Office, instead of being reserved as a 
fund for the liquidation of claims are in many instances absorbed in payment 
of salaries, advertising, and other expenses. They look like concerns which 
have been got up merely in order to pay salaries to certain officers. Where 
the plan of Assurance is a mutual one, this of course leaves the members a poor 
prospect. Where there is some admixture of the proprietary plan, the danger 
is primarily to the shareholders, and only secondarily to the policy-holders." 

If these views required confirmation, the circumstances which 
have occurred in connexion with the Oak and Security Mul -asX 
Offices, furnish it to the fullest extent. 

* Vide article in Chambers' Journal* frequently quoted by the Mutual Offices. 



CAPITAL SELF-SUSTAINING. 225 

Having viewed the subject under several aspects — first, with 
regard to those who deem a large capital necessary ; next, as to 
what we may term the secondary influence of capital, viz. : that 
of securing bond fide intentions ; and lastly, in relation to those 
who declare no capital to be necessary at all ; and who, like the 
advocates for a very large capital, hardly sustain their case, we 
are led to the conclusion, that to meet the circumstances of the 
present day, the medium course must be adopted ; and we there- 
fore say, with Mr. Charles Babbage, who saw the important bear- 
ing of this point in relation to the constitution. of future Com- 
panies, " I hope, however, that it has been clearly established in 
the preceding pages, that a large capital at the commencement 
is quite unnecessary ; and that it will be conceded that in a busi- 
ness in which the receipts (the premiums) are paid long before 
any demands take place, and where consequently there can occur 
no losses from bad debts — a failure can only arise by an improvi- 
dent consumption of the funds, or by employing a Table of Pre- 
miums inadequate to the risks undertaken."* 

Mr. McCulloch takes an equally reasonable view of the case : 
" The subscribed capital and fortune of the proprietary body afford 
a guarantee on which the public may depend in dealing with any 
respectable Company, while by receiving a share of the profits, 
the insured gains by the flourishing condition of the Association" 
And so likewise Mr. Samuel Brown : " In whatever way it may 
be invested however, it is evident that any amount of capital 
larger than is absolutely necessary to render the assured safe, in 
the event of their own accumulations failing them for the time, to 
meet a particular claim or claims, must be a drag and hindrance 
to the increase of their business." Dr. Farr adding almost in the 
same words, " It is clearly in this as in other ways, disadvan- 
tageous to employ more capital than is required to carry on the 
business with safety, as in proportion to its amount the rate of 
profit is diminished." 

This last observation of Dr. Farr's, as indeed the close of Mr. 
Brown's, which preceded it, opens up another phase in the con- 
sideration too frequently overlooked; viz., that the capital paid 
up by the shareholders does not remain unproductive. The North 
British Review (before quoted) gives us the following on this 
point : — 

" It is quite manifest, although it is often overlooked, that if a body of pro- 
prietors get only an average rate of interest on their paid-up capital, they do 
not thereby withdraw a single farthing of the surplus or profit fund arising on 
the payments of the assured. They merely receive the interest which their 
capital has itself yielded, and it is only in so far as they draw a higher rate of 
interest than the average of that borne by the Company's investments, or 
make slump bonus additions to their paid-up stock, that they trench upon 
the assurance profits, and so withdraw what in a Mutual Office is divided 
wholly among the assured themselves." 

* Babbage's Comparative Views. 



226 CAPITAL SELF-SUSTAINING. 

And another writer ably follows suit : — 

" It has (he says) suited the purpose of the young Mutual Offices to decry 
capital as an incumbrance, just as if the capital were never placed out at 
interest ! — never used as a means, and a powerful means too, of drawing busi- 
ness not otherwise to be obtained ! They say, — ' Look at the interest on so much 
capital : you, the insurers, have to provide for that before any profit can be 
divided.' Now, this is neither fair, nor is it true, as the capital of a Company is 
always invested at the highest rates of interest compatible with security ; and 
in these days of so many unsound Insurance Companies, the public will rather 
prefer trusting to capital, even though it should cost something additional. 
But there is no reason why, if wisely used, the capital of a Company should 
not rather be made conducive to the prosperity of the undertaking ; and the 
public will not easily be drawn into the belief, that the capital is put into 
coffers, and kept merely to be looked atP 

"We have nothing further to add. Every point which occurs to 
us as bearing upon the question has been discussed, and what we 
hope will be considered still better, discussed impartially. With- 
out prejudice to the existing Mutual Offices, which for the most 
part are admirably conducted, we think the inference as to the 
constitution of future Companies is most clear, and we pass on to 
the next chapter. 



CHAPTER VI. 

DISCUSSING THE RELATIVE ADVANTAGES OF THE MUTUAL, 
PROPRIETARY, AND MIXED SYSTEMS. 

On the general question of the relative advantages of the 
Mutual, Proprietary, or Mixed systems, but little more need 
be said. The conclusions we draw from our own experience, and 
from the authorities we have quoted — representing all sides of 
the question — are : — 

First. As regards Proprietary Offices, by which we mean those 
giving no share of profits to the policy-holders, that if the rate of 
premium be in proportion to this curtailment of advantage, many 
cases arise in connexion with business where security at the 
smallest possible cost is very desirable. It must not, however, 
be forgotten that nearly all the Mixed and Mutual Offices have 
Proprietary or " non-participating " branches which meet such 
cases. The existing purely proprietary Offices are the York- 
shire (1824), and the Preserver (1843). The rates of premium, 
however, in these cases appear to us not to be sufficiently 
low to compensate for the loss of participation. These Offices, 
having establishments to keep up, perhaps, can hardly be ex- 
pected to offer terms as low as the non-participating rates of 
other Offices, which can work both branches at nearly one cost. 
Nor do they stand in any better position with respect to the non- 
liability of the assured, failing the success of the Office. To the 
above Offices might have been added, as far as its Proprietary con- 
stitution goes, the Liverpool and London (1836). This Office, how- 
ever, although constituted as a Proprietary Company, guarantees 
to its policy-holders certain fixed periodic additions to the sums 
assured, and therefore in effect is classed as a Mixed Office. The 
scheme was devised solely to protect the assured. 

Second. As regards the Mutual Offices, or the mutual system, 
several conditions appear to be essential to success. (1) Honesty 
of purpose amongst the promoters. (2.) Extreme economy in 
formation and management expenses. (3.) A sufficiency of mem- 
bers at the time of starting to bring the mortality operations 
under the law of average. " As the members increase," says Mr. 
Brown, " the doctrine of averages will prove that the deviations 
from the mean number of deaths became contracted in proportion 
within narrower limits." All the existing purely Mutual Offices 
have been fortunate in these particulars. We say purely mutual, 
because it has come to be the fashion, since the idea of mutuality 
has again become popular, for new Offices to call themselves 
mutual, when in constitution they are essentially of the Mixed 
class, and in the terms of their deeds of settlement it is quite 



228 PECULIAKITIES OP THE MUTUAL OFFICES. 

optional 'how long they shall so continue. This is a species of 
misrepresentation which the public should be alive to. But, per- 
haps, the most important poiut for assurers to look to, is that in 
all the Mutual Offices (with the exception of the Scottish Provi- 
dent which adopts a peculiar mode of appropriating its surplus) 
the rates of premium charged are higher than those charged by the 
majority of the Mixed Offices. This excess of premium has been 
characterized by one of the writers recently quoted, with a con- 
siderable degree of shrewdness, as " capital in disguise," and this 
is really the truth. If it were the custom of Mutual Offices to 
divide, at given periods the whole of the profits amongst the mem- 
bers, the excess in the premiums would not be of material con- 
sequence, beyond the inconvenience at the time of paying the 
premiums, because the amount would be returned improved at 
interest. But, in consequence of having no guarantee capital, a 
Mutual Office can never safely divide all its profit fund : two- 
thirds or three-fourths are the customary proportions — the portion 
remaining undivided constituting, or increasing, the reserve or 
contingent fund. 

These facts appear to have escaped the notice of many of the 
writers in support of the Mutual system. By others they have 
been noted and turned to account. Mr. Pocock has pointed it 
out as obvious, " That in order for such a surplus fund to be pro- 
vided, the early members must, in fact, contribute in a much 
higher degree than the subsequent members to its accumulation." 
He instances the Equitable, observing that its large surplus cap- 
ital has been derived from the unduly excessive rates of premium 
contributed by the early members, the benefits of tohich are alto- 
gether enjoyed by others. We are not sure that this is true of the 
Office in question to the extent here implied — investment in the 
funds when at their lowest ebb, lapsed policies, and other cir- 
cumstances combined to swell the funds of this Society. But it 
is more or less true in all the mutual Societies, and led Mr. Po- 
cock, as it has led others, to the conclusion that, " however much 
a Mutual Assurance Society may be desirable in its maturity, it 
cannot be so considered in its infancy, as it must, in order to be 
safe, require of its members a larger amount of contribution 
than would, under ordinary circumstances, be sufficient to provide 
for the claims of the assured" 

There is one point in connection with Mutual Offices upon 
which much uncertainty prevails. The general impression is, that 
the members of a Mutual Society are liable to each other for the 
sums guaranteed under their respective policies ; and this impres- 
sion is founded upon the decision in the case of " Carlen v. Drury" 
(1 Yes. and B. 154), wherein the Lord Chancellor says, " I hold 
it quite clear that each individual is at law answerable for the 
whole of the debts of the concern." And more recently, in the 
case of " O'Brien v. Lord Kenyon" (6 Exch. 403), the liability of 
policy-holders is held to attach on the ground of participating in 



PECULIARITIES OF THE MIXED OFFICES, 229 

the profits of the Society. With the exception, however, of the 
old Equitable, all the existing Mutual Offices have a condition in 
their deeds, and also in their policies, that the funds of the So- 
ciety only shall be liable for the claims upon the Society, whether 
under policies or otherwise. But this clause, if it protects the 
private properties or fortunes of the assured in the event of the 
Office going wrong, must greatly detract from the element of 
security in the policies. In the Mixed Offices not only are the 
funds liable for all claims under their policies, but also the entire 
fortunes of the shareholders, the liability not being limited to 
the amount subscribed in shares, as in the case of other Joint 
Stock Companies, except Banks, where also the liability of the 
shareholders is unlimited. 

Thirdly, as regards the Mixed principle, and the Offices founded 
thereon, we may say as a fact, and without any expression of 
partiality, that it has done more to popularize Life Assurance in 
this country than all other causes united. It combines security 
of performance with liberality of rates ; and where sound and 
economic management has been exercised, we believe the Mixed 
Offices — at least, the best of them — have given to their policy- 
holders equal advantages with any of the Mutual Offices now 
existing — always excepting the Equitable Office, with its peculiar 
opportunities for creating wealth, and also taking into account — 
as should be done in all such comparisons — the rates of premium 
charged by the respective Offices. The chief reason which has 
enabled the Mixed Offices to compete with the Mutual ones in 
bonuses, and general liberality of features, may be traced to the 
circumstance that the former are enabled at each division of 
profits to distribute a larger proportion of the ascertained surplus 
amongst the assured than a Mutual Office ever can with safety — 
having their proprietary capital to fall back upon. 

In detailing the advantages of the Mixed system, we are not 
unmindful of its defects : amongst the most prominent of which 
may be noted the too large participation, as we think, by the 
shareholders in the Mixed Companies, the proportion being in the 
majority of cases one-fifth (20 per cent.), in other cases one-fourth 
(25 per cent.), and in several as high as one-third (or 33 per 
cent.) We hold that one4enth would be amply sufficient for the 
risk incurred ; and this reduced proportion might perhaps have 
the effect of curtailing that tendency to extravagance in obtain- 
ing business which we regret to see manifested in some quarters : 
bringing as it does the entire system of Insurance into disrepute. 
Several of the most successful of the English, as well as the 
Scotch Offices, only award to their proprietors the proportions 
just named, as may be seen by a reference to our " Bonus Ta- 
ble," to be given in a subsequent section. Another evil formerly 
too prevalent was that of having a larger paid-up capital than 
was really required for the purposes of the Office. Perhaps, 
however, of late years the tendency has been too much in the 



230 AUTHORITIES ON THE QUESTION. 

opposite direction. The only Mixed or Proprietary Office having 
the whole of its subscribed capital paid-up is the Globe. But 
this Office invested its capital in the funds at a period when 
they were very low, and thereby obtained very nearly two mil- 
lions for one.* 

What we have above stated with reference to the liability of 
shareholders in Mixed Companies is the generally admitted law 
of the subject, but we know that some of these Companies have 
endeavored to evade this liability, by inserting a clause in the 
deed of settlement, and in the policies, of such a nature as to 
render the limitation of liability a matter of special contract. 
This clause is generally to the following effect: — "That the cap- 
ital and funds of the said Society for the time, being undisposed of, 
according to the deed of settlement, shall alone be answerable 
for any claims under such policy, security, or contract ; and that 
no Director or member of the said Society shall upon any account 
or pretence whatever, be subject or liable to any demand in re- 
spect of such policy, security, or contract, further than to pay to 
the funds of the Society the full amount of his obligation for the 
time being, in respect of his share or shares in the capital stock 
of the Society." The case of Hallett and others v. Dowdall, (21 
Law Journal, 1ST. S., p. 98, Q. B.) appears to confirm this view. 
The Judges in Error in this case held that partners or share- 
holders may legally stipulate amongst themselves that each one 
shall be responsible only to the amount subscribed for by him, 
and that where any person accepts a policy with notice of this 
fact, he can only recover from the shareholders the amount 
of their shares that may happen to be unpaid : but where a party 
has no such notice, the law would follow its usual course. The 
law as to the liability of shareholders is stated to be very accu- 
rately defined in this case. 

Mr. F. G. P. ISTeison says, " It is a question so much debated, 
that I should not like to say whether a Mixed Proprietary and 
Mutual Company, which is the one alluded to, or a purely Mutual 
Company, is the more advantageous to the public. The public, 
indeed, look at the question chiefly with the view to get a profit 
out of the money they invest in the Institution ; but it must be 
observed, that in the case of a Mutual Company, when they 
begin, their business is small, and although they give all their 
profits up to their policy-holders, it may happen that the frac- 
tional amount of the gross profits paid by a Mixed Proprietary 
Company to its profit policy-holders, although nominally small, 
yet it may form a comparatively larger bonus than the whole 
amount of profits distributed amongst the assured in a Mutual 
Office." 

Mr. E. J. Farren says of the Proprietary (Mixed) system, " I 
do think it is better than the Mutual, and I think it is the only 
one the public will eventually adopt. I have always thought so. 

* Now amalgamated with Liverpool and London.— Note, 1866. 



COST OF THE GUARANTEE FUND. 231 

I imagine that the opposite feeling has been a matter of miscon- 
ception, which will eventually change ;" Mr. Higham adding, on 
the same question, " I think opinions are coming round." Dr. 
Fair conceives, " that Mutual Societies, carried on with great 
economy, might be successful." 

The weight of testimony from the authors we have quoted ap- 
pears to us decidedly in favor of the Mixed principle, although 
they certainly have not been selected with this view. But there 
is another kind of testimony which seems more emphatically to 
mark the public estimation of the Mixed Offices, and that is 
their having issued (on the estimate already presented) Jive poli- 
cies to every one issued by the Mutual Offices : a fact subscribed 
to even by the supporters of the latter.* The cost of the 
44 Guarantee fund " to the assured in the Mixed Offices has been 
much dwelt upon. Leaving out the right of participation in the 
profit fund, the cost of the guarantee fund to the participating 
policy-holders is the difference between the interest made upon 
the investments and that paid to the shareholders. In some of 
the younger Mutual Offices we observe the practice has been 
introduced of raising a management or contingent fund by Loan, 
repayable by instalment over a given number of years. Here 
there appears great injustice, for it is not merely a question 
between interest received and interest paid, but the actual prin- 
cipal of the Loan is paid out of the contributions of the early 
members. 

* Messrs. Chambers, some years since, stated the proportions as more than three to one ; 
and we have seen Mr. Samuel Brown speaking of the luck as all on the side of the Mixed 
Offices. Very few Mutual Offices have been of late years established. 



CHAPTER VII. 

EXPENSES OP MANAGEMENT. 

Two other points, each having an important bearing on the 
practice of Life Assurance, yet remain to be disposed of. 1. The 
Selection of Lives. 2. Expenses of Management. Here we have 
lives and money again under consideration. The selection of 
lives is necessarily an important element in sound management. 
How important, we shall endeavor presently to define. And 
with regard to expenses of management, there perhaps was 
never greater occasion than now, for the careful consideration of 
this point. It is tender ground to touch upon, but its importance 
should outweigh all other considerations. We purpose here to 
give it precedence. 

The materials we have at hand are comparatively scanty, and 
to some extent conflicting, but we hope to lay down a rule which 
will, in addition to being self-evident, stand the test of experi- 
ence. As is our custom, we will first glance at what has been 
said by others on the subject. " The expenses of carrying on an 
Insurance Office," says Professor de Morgan, " though they vary 
somewhat with the amount of business, yet do not by any means 
increase as fast. In the first year of its existence, it would not 
be surprising if all the premiums paid were swallowed up by 
house-rents, salaries, &c, while in process of time increase of 
business might reduce such expenditure to 2 per cent, upon the 
yearly premiums." Mr. Samuel Brown presumes that it is " only 
in the early history of an Office that such a proportion as 5 per 
cent, would be required for expenses of management." Mr. 
Samuel Ingall, actuary of the Imperial Office, in his examination 
before the Select Committee on Assurance Associations, said, 
" If the expenses of management be more than one-sixth of the 
amount of premiums (16 per cent.) for any length of time, the 
Office could not be said to be doing profitably ; and if the expen- 
ses amounted to one-third of the annual premiums, I should say 
it was going on in a very bad way." These remarks he applied 
to Offices which had been in existence seven to ten years. Mr. 
Downes, actuary of the Economic Office, stated before the same 
Committee, "That from 10 to 12 per cent, of the premium, with 
an Office well-established, would be sufficient," and at another 
time, that " at the end of five years not more than the margin 
(loading) should have been spent in expenses." Most authorities 
agree that the expenses of a Mutual Office should be kept down 
to the lowest point. 

Turning from the theory of Office expenditure to its practice, 
we find some startling facts. Mr. Samuel Brown informed the 



WHAT EXPENSES OF MANAGEMENT OUGHT TO BE. 233 

Select Committee of 1853 of the result of some comparisons he 
had instituted, between 28 new Offices and 21 old ones. In the 
latter the first five years' average expenses were " not more than 
14 per cent, including deeds of settlement, preliminary expenses, 
and the expenses of all kinds of establishing the Companies." In 
the 28 new Societies the expenses had averaged more than seventy- 
one per cent, per annum. Mr. S. Ingall confirmed these results, 
so far as the young Offices were concerned with a very slight 
variation. He found the highest expenditure, by any one Office, 
was 264 per cent, on the amount of premiums and annuities re- 
ceived, and the lowest 30 per cent.* The expenses of the Me- 
tropolitan Life Office are stated to be only just over 4 per cent, 
per annum on the receipts, and from the commencement to ave- 
rage only a little over 5 per cent.f In the Friends' Provident 
Office the expenditure has been at the rate of 4£ per cent, on the 
net premiums, or including agency commission, about h\ per 
cent, on the gross premiums.^ While in another Office (we be- 
lieve the Scottish Widows' 1 Fund) it has been stated that, while 
the receipts in the year 1853 were £479,666, the expenditure was 
only £6,710, being about lj per cent. 

Dr. Farr speaks of the expenses of the existing 150 or 180 
Offices. "If the expenses of capital and of the foundation of 
new Companies are taken into account, they probably do not 
amount to less than £1,000,000 a-year, and cannot be less than 
three-quarters of a million sterling ;" — a sum sufficient to pay 
the premiums on thirty or forty millions of assurances ! 

Several considerations arise out of the preceding facts and 
opinions, without which they can hardly be reconciled or applied. 
When we speak of expenses of management, we refer to all the 
deductions which are made from the premiums actually paid by 
the policy-holders down to the time the same are invested as 
part of the funds of the Office. We therefore include the agents' 
commission, which forms an important item in the expenditure. 
Now it is more than probable that Professor de Morgan and Mr. 
Brown do not, in the estimates above given, include this item, 
while Mr. Ingall and Mr. Downes, without doubt, do include it. 
The Metropolitan Office has never paid agency commission on its 
business. The Friends'' Provident Society pays an agency com- 
mission when the premiums are remitted through agents, but a 
large portion of its premiums are received direct from the as- 
sured. In the case of the 21 old against the 28 new Offices, as 
well as in the case of the \\ per cent, expenditure, this point is 
to be noted : the per centage is spread over the entire income, and 
not the income from premiums only — therefore, no proper com- 
parison can be instituted. In the older Offices which have been 
well managed, a considerable portion of the annual income arises 
from interest on investments / now it is manifest that the expen 

* Vide Parliamentary Report. 

t Richard Beck's Practical Hints on Life Assurance. 

% See Post Magazine, 13th December, 1856. 



234 SCHEME FOR REGULATING EXPENSES OF MANAGEMENT. 

diture upon this source of income need not, and ought not, to 
cany anything like the proportion of expense which is properly 
chargeable on the premiums: indeed, in the Office calculations 
for the improvement of the funds no allowance for expenses is 
made. 

On the premiums the case is entirely different. These — as we 
shall see in a subsequent section specially devoted to the subject 
— are made up of two parts : first, the net sum required by the 
Office to meet the risk of death — and secondly, a per centage or 
" loading" upon that to meet (1) the cost of management, (2) to 
form a contingent fund to meet excess of mortality or loss on in- 
vestments, and (3) in a Mixed or Mutual Office to lay the founda- 
tion for a bonus fund. We have only here to do with the " load- 
ing" of the premiums as relating to the costs of management. On 
an average of the Offices this addition may be taken at one-fourth, 
or 25 per cent, of the premiums actually paid by the assured. Is 
not the fact, then, apparent to the most inexperienced that if there 
be only a margin of 25 per cent, for expenses under all heads, and 
that the remainder of the premium be required to meet the actual 
losses, which may be expected in the best managed Offices from 
the mortality amongst the members — is it not, we say, clear to the 
most simple comprehension that the expenditure can never exceed 
25 per cent, of the premiums received without endangering the per- 
manent stability of the Office so transgressing ! 

We are, indeed, perfectly aware that no new Office can be ex- 
pected to establish a business at an expenditure not exceeding 25 
per cent, of the receipts from premiums. But what course should 
it adopt ? The answer appears a simple one. If a Mixed Office, 
honestly constituted, it has the paid up portion of the shares sub- 
scribed ; if a Mutual Office, it has its guarantee fund raised by 
loan or shares ; for we presume no one would in the present day 
attempt to found an Office without this auxiliary. Let the balance- 
sheet be made out at the end of each year of operations. From 
the premiums received deduct 25 per cent., or whatever the per- 
centage of loading may be in each particular case. Set off the 
sum so deducted against the expenses of formation and manage- 
ment : and the balance of expenditure under these two heads 
charge to the paid up capital or guarantee fund. The balance of 
premiums annually remaining should be promptly invested at a 
rate of interest not less than that assumed to be realized in the 
construction of the Tables. The balance of the paid up capital or 
guarantee fund should lie at call or deposit, so as to be readily 
available for emergencies, and should in every respect be a dis- 
tinct fund from that formed by the reserved portion of the pre- 
miums. 

In the case of the premium fund, the interest realized should, 
of course, be added to the fund, to carry on the process of com- 
pound interest provided for in the construction of the Tables of 
rates. The interest realized on the capital or guarantee fund, or 
on the balance of it from time to time remaining, and that only, 



SHOWING THE RESULT OP OUR PLAN. 235 

should be paid to its subscribers. Such an arrangement would 
carry honesty of intention on the face of it, and would inspire con- 
fidence. If several persons combine their capital to deal in any 
mercantile commodity, and the speculation does not answer, on 
whom is the loss supposed to fall ? If a number of persons com- 
bine to sell Assurance policies, and the trade does not answer — 
the shop does not pay its expenses — on whom should the loss foil 
but, as in the other case, on the promoters ? In the history of In- 
surance Companies we frequently find that the worst paying con- 
cerns declare the largest dividends, and when the crisis arrives the 
original promoters are nowhere to be found : they have pocketed 
their dividends, sold their shares, and cleared off. To follow out 
our proposition : If the business was successful, the encroachments 
on the capital or guarantee fund would be less and less each year, 
until, in a few years, the turning point would arrive, and the ex- 
penses being less than 25, or the other per centage of the gross 
premiums, additions would be made to these funds until they at- 
tained their original amounts, when they could, in the case of the 
Mutual Offices, be repaid to the lenders, with a fair share of the 
profits realized, as a remuneration for the risk incurred ; and, in 
the case of the Mixed Offices, be set apart, with other future pe- 
riodic additions, regulated by the constitution of the Office, for 
the benefit of the shareholders. 

But assume the other side of the question, as, unfortunately, 
modern experience entitles us to do. Assume that year by year 
the expenses, current and otherwise, continued to encroach upon 
the funds provided to meet them, when would be the proper time 
to bring things to a close ? Does it require any consideration to 
answer — when the funds so provided are exhausted! If the pro- 
prietors or lenders determine to increase the funds, the experiment 
will last so much the longer, but in no case should a single sixpence 
of the net premium fund, and its accumulations, be encroached 
upon. Under such a system, and such regulations, how different 
would be the position of all parties, as contrasted with the plan 
now generally pursued of carrying on the game till the last shil- 
ling is expended, and only closing the doors when the brokers or 
less auspicious visitors " take stock" of those who pass in and out ? 
Shareholders would be protected by at once knowing the extent 
of their loss, and thus saved the necessity of precipitate excursions 
to Boulogne, or to the German Baths, regardless of wind, weather, 
and expense. Policy-holders would no longer be compelled to 
seek a remedy in the Court of Chancery, as in the case of the 
Amazon, Caxton, Protestant, and a dozen others ; or to quietly 
submit to be defrauded of the premiums they have paid, as in the 
case of the Independent, the Tontine, the Reciprocal (!), and 
others; to say nothing of being called upon, as in the case of the 
Security (!!) Mutual, not only to lose the premiums paid, but also 
to pay the debts of the Society by virtue of the mutual principle !* 
while Directors might be spared the annoyance they now incur by 

* Vide Post Magazine, 7th June, 1856. 



236 THE SOURCES OP PROFIT CONSIDERED. 

reason of failure. Want of success is no disgrace : want of honor 
is lastingly so. Under the plan we have described the assurance 
fund would remain intact; and at any moment an assignment 
could be made to a respectable and successful office : while now, 
in nine cases out of ten, the transfer of business simply indicates 
handing over the policy-holders of one unfortunate to another 
equally so, but a little more daring and speculative. 

There are, undoubtedly, in well managed offices, other sources 
out of which an occasional excess of expenditure can be met than 
that arising from the loading of the premiums. They may be 
thus classified: (1.) By investing the funds at a higher rate of 
interest than that assumed in the Tables. (2.) By lapsed and 
surrendered policies. (3.) By the benefit arising from the selec- 
tion of lives. This last point will be next discussed. The others, 
in our section on profits or " bonuses." It may be assumed that 
offices which exhibit no possible regard for the expenses they 
incur, are equally regardless of the class of lives they accept ; and 
a consideration of the items " claims by death," in their several 
balance-sheets, confirms this view. With respect to surplus inter- 
est on investments again these offices are at fault : for spending 
all their funds as they come in, they have no money to invest. 
On the score of lapsed policies they do better; for who would 
not let their policies lapse rather than sink more money in a fail- 
ing concern — unless, indeed, the fatal probability of their speed- 
ily becoming claims reconciled them to the other alternative ! 
Even under the most favorable circumstances, however, it would 
be impossible for a young office to realise much under these 
heads ; certainly by no means sufficient to justify an expenditure 
of some 50, 60, or even 10 per cent, of the premiums, as we have 
seen in some cases, assuming that such a rate of expenditure was 
to be continued but a few years, and then gradually to become 
reduced. On this last point, we think Mr. Percy M. Dove, of the 
Royal, took a thoroughly business-like view when he said — refer- 
ring to actuaries who appear to sanction such extravagance — 
" There are great mistakes, even among some professional men, 
in thinking that very large expenses, even of 50 or 60 per cent., 
are allowable in the first establishment of a Company, to be 
spread over a series of years, whereas the fact will be that a Com- 
pany beginning with such an expenditure, and getting business by 
its means, will, in few instances, have the courage to reduce to 
any great extent its future outlay" Mr. Edmonds, of the Legal 
and General Office, was quite right in informing the Assurance 
Committee (in reply to a question) that while the proportionate 
expenditure of an office is " continually diminishing" during the 
first five or ten years, " it never amounted to 82 per cent, in any 
office that has succeeded, even in the first five years." On the 
contrary, all those offices that have best succeeded have been the 
most economical at starting. An office now having an income of 
half a million per annum, spent in preliminary expenses the sum 
of three hundred and seventy-five pounds eighteen shillings ster- 



HOW EXPENSES SHOULD BE LEVIED. 237 

ling ! In proportion as they have curtailed expenditure so have 
they achieved success. 

We have already extended this particular section beyond the 
premeditated bounds. But passing on from a consideration of 
what the expenses of management ought to be, we arrive at 
another, not without its importance — it is, how ought these ex- 
penses to be provided? We have already explained that at pre- 
sent they are met by a per centage,* or loading on the net pre- 
miums. This, however, operates in many cases exceedingly 
inequitably. It would, we apprehend, be difficult to say, on 
office experience, that a policy for a £1,000 on a life aged 20 costs 
more to " manage" than one for the same amount and on the 
same conditions, on a life aged 60. But inasmuch as the annual 
premium at the latter is three times as much as at the former 
age, the latter may be said to contribute three times as much to 
the Office expenditure during the currency of his policy as the 
former, assuming the per centage of " loading" to be equal at all 
ages. Of course the item of " agent's commission," on the pre- 
sent system of a per centage on the premiums is heavier, but this 
is a mere matter of arrangement between the Office and the 
Agent, and any modification of the system could be made to in- 
clude a proper adjustment of this point. The question has not 
escaped the attention of actuaries, although at present it has not 
been practically taken up. Professor de Morgan says, "the 
yearly contribution of every member to this fund ought to be 
the same." Mr. Higham, of the Royal Exchange, replies — " to 
tax all policies alike would be to prohibit small assurances ;" add- 
ing, " I think the yearly contribution of every member to the 
fund for expenses ought to be the same per centage on the amount 
of his assurance" and suggesting five shillings per cent, per an- 
num on the sum assured as " about the amount required by an 
Office of average magnitude." Mr. T. R. Edmonds also named 
the same sum. 

Mr. Jellicoe speaks of the present system as " an arrangement 
which is quite inconsistent with either justice or propriety; since 
putting apart the item of commission, there is no reason whatever 
why each of the assured in a given sum should not make the same 
contribution to the annual surplus and expenses, whether likely to 
be called to do so for a short period, or for many years to come."* 

We think this plan would be an improvement ; but even to it 
it might be replied, that a policy for £2,000 costs no more to 
carry through the Office books than a policy for £200, although 
the agency commission, stamps, and perhaps medical fee might 
be greater. But we do not intend to dwell further on the point. 
It is possible, in the distribution of profits, to remedy very many 
of such seeming inequalities, and in some Offices this case is met. 
These points will come again indirectly before us in our chapter 
on " Bonuses," and the " Selection of an Office." 

* Vide Assurance Magazine, Vol. ii., p. 336. 



CHAPTER VIII. 

SELECTION OF LIVES. 

The heavy pecuniary engagements of Life Assurance Offices 
depending almost solely on the contingency of death, it is 
obvious that the selection of healthy lives, on which to base their 
contracts becomes a very important, indeed, a primary, considera- 
tion. To those unacquained with the practice of Life Assurance 
it might indeed appear, that inasmuch as the rates of premium 
are deduced from Mortality Tables, founded on observations of 
the mortality of the entire kingdom — the young and old — the 
weak and the strong — the diseased and the most robust — that it 
would be sufficient for the safety of the Office if a fair average 
of all these classes could be brought to contribute to, and partici- 
pate in its funds — and so it would, if only this fair average could 
be secured ! Here the difficulty hinges ; but we have already to 
some extent prepared the way for its solution. In our chapter upon 
longevity we have shown the ill effects of undue mental exertions 
and excitement as against bodily occupations ; and in our general 
notes on mortality, we have shown the ill effects of town as 
against country residence. Now to what class do the bulk of 
assured lives belong, and, for the most part, where do they dwell ? 
To the first part of the question the answer is, that from amongst 
the professional and trading classes — those who are borne down, 
too frequently, by the mental anxieties of their callings — becoming 
old men even in their youth — is drawn the great body of Life 
Assurers. These classes, by very necessity, must reside near the 
" busy haunts of men" — in bustling towns and pent-up cities — 
many of them in dismal chambers and ill-ventilated counting- 
houses; places to which a wholesome atmosphere becomes a 
stranger, and the sun's rays never penetrate ! It is against evils 
such as these selection has to combat. We have given numerous 
authentic instances of persons who, in this country, have lived to 
ages considerably over a century. We can put our hands on 
thousands of cases where a hundred years has been the limit — but 
was ever an assured life known to die at such an advanced age ? 
We believe not. Those who have hitherto attained to those ages 
have been persons of the humbler ranks of life. Agricultural 
laborers, gardeners, fishermen, and of similar occupations, and 
these are not the class of lives Offices are called upon to assure. 
Let us look to the records of the Offices. The Amicable Society 
has assured lives for a period of 150 years, but the oldest life on 
its books died at 97 ! The Pelican Office in 60 years has lost one 
life at the same age. The Royal Exchange, in 135 years, has no 
experience beyond the age of 96 ; the London Assurance, during 



AGES OF ASSURED LIFE. 239 

the same period, can only reach to 90. The Equitable, in a 
century, furnishes no case beyond 95 ; the Albion, in half a 
century, stops at the same point. The Rock, in a like period, 
paid on its oldest life at 94 ; the Union and the Imperial the 
same. The Sun has no experiences in lives beyond 92 ; the Atlas 
and the Law Life stop at the same point. Yet how is it ? In 
Annuity and Tontine Societies we hear of no such transient 
limits ! It not many years since Mary Benton, a nominee in a 
Tontine at Perth, died at the venerable age of 122; while, but 
last year, Miss Cunningham, nominee in the same Tontine, died at 
Edinburgh at 107. But here the opposite conditions prevail: 
peace of mind by reason of easy circumstances, and at least in one 
case, a country instead of town life. For other statistics on the 
longevity of annuitants, see page 144. 

It is, perhaps, impossible to trace all the causes which operate 
in these opposite directions : but we have the fact, in addition to 
the foregoing incidents, that Mortality Tables, Avhich have been 
constructed upon the recorded experience of assured life — with 
the benefit of selection — show results no more favorable to human 
life on an average of ages than those deduced from the general 
mortality of the kingdom — vide the Equitable, Amicable, and 
Experience Tables already published. What the result might be, 
in the absence of selection, we cannot say, the experiment, to our 
knowledge, not having been tried ; but reasoning upon the facts 
already before us, and the authorities we have to cite, we should 
suppose it would be fatal to the success of any Office that might 
hazard a trial. The great founder of the English Offices, Dr. Price, 
clearly anticipated such a state of things as above indicated. 
"Those persons," he says, "will be most for flying to these 
establishments who have feeble constitutions, or are subject to 
distempers which they know render their lives particularly 
precarious / and it is feared that no caution will be sufficient 
to prevent all danger from hence." And herein he solved the 
enigma. 

Mr. Morgan, in one of his addresses to the Court of the 
Equitable Society, spoke of " selection" as a " perpetual source of 
profit." In his preface to the Tables of the Experience of the 
Equitable Society, he enters more fully upon the question : — In a 
body of lives of the same age, all selected as healthy from the 
general mass of mankind, it is obvious that the rate of mortality 
must be considerably less for the first ten or twenty years after 
selection than amongst those from whom they are thus chosen. 
As, however, these selected lives advance in age, their general 
health, and the rate of mortality amongst them, will naturally 
approximate to the common standard. This approximation 
cannot be accurately estimated, if the observations be taken from 
a blended mass of lives." Subsequent writers have noted this 
last point, and prepared Tables based on observations upon classes 
of lives assured at the same age. The results will be referred to 
as we proceed. 



240 THE ADVANTAGES OF SELECTION DISCUSSED. 

Mr. Charles Ansell said, before the Select Committee, "I 
should think the mode in which lives are selected, as it is admir- 
ably termed, that is the care taken in accepting none but desirable 
lives, is an exceedingly important element / and the best calcu- 
lated scale of premiums in the world toould not make an Institu- 
tion safe that is careless in accepting all the lives that are brought 
to it." Mr. J. J. Downes cautions us against putting too much 
faith in the benefit of selection. " It is supposed," he says, " that 
people coming into an Assurance Office are so selected that they 
will not die for a considerable time : now, that is not the case ; 
we find people die in the first year of their assurance, and that is 
as likely to happen in one Office as another." Mr. T. R. Edmonds 
speaks of a very large element of the safety of a Life Office, 
depending " on the way in which the lives have been selected," 
adding, however, that the value of selection "is always diminish- 
ing, and is of very little value in the case of policies which have 
endured more than ten years / they become the average lives, 
their mortality being very nearly the mortality of male lives 
among the general population at the same ages." These con- 
flicting opinions point out the necessity for further investigation. 

Dr. Farr, who throws an interest into all subjects of this class 
upon which he touches, gives us some information on this 
point : — 

" The Selection of Lives," he says, " is not yet fully understood, but it may 
be broadly stated that 27 in 1000 men of the population of the age of 20 and 
under 60 are suffering from some kind of disease or other ; that several of the 
diseases are of long duration, that others are recurrent, and that some are 
hereditary ; that consumption, the most common fatal disease, lasts on an 
average two years, although it varies considerably in duration ; and that 
cancer, another form of chronic fatal disease, is much more common in women 
than it is in men. On all these grounds it is clear that selection will diminish 
the mortality in the first year or two, or three or four years subsequent to its 
exercise. As the age of persons assuring advances the influence of selection 
increases, and in this way it is stated that a former Government incurred 
heavy losses by the sale of Life Annuities on old lives to unscrupulous specu- 
lators." * 

And in another place he adds, that — 

" Any advantage an Office can secure by the operation of selection may be 
set down as legitimate profit. If some skill be not applied in selection the 
mortality of assured lives will he above the average of the nation, and the 



Mr. Samuel Brown, also a competent authority, speaking of the 
profits arising from the mortality being less than that expected 
under the Table of Mortality adopted, points out that this is not 
a permanent source of profit: — 

" The Selection of Lives," he says, " tends to bring together a body of 
individuals in a higher state of health, and consequently exhibiting a less 
mortality at any given age for some years after selection than would be 

* Vide Twelfth Report of the Registrar-General. 



FRESH AUTHORITIES ON THE SUBJECT. 241 

experienced in the general mass of the nation. Young Offices, therefore, fre- 
quently declare bonuses which they cannot hope to maintain ; and whilst the 
members' expectations' have been excited, and their desire for gain stimulated 
by the auspicious commencement, at each succeeding division this source of 
profit will be diminished, till at last the balance will be entirely on the other 
c-ide. The surviving members, who have been too sanguine in their hopes, 
and have divided amongst themselves and their deceased co-partners, the 
provision which ought to have been made for a mortality, which must neces- 
sarily increase with the age of the Office, will, with reluctance, have to refund 
part of their too early acquired gains ; or what will be equally detrimental to 
the success of the Company, fall back for assistance on the proprietary body 
where any such exists." Again, " The general tendency of selection cannot 
be mistaken, and it is universally found that if the mortality in the first few 
years be less, it increases very rapidly after a short period." 

This point, which is one of great importance, is further illus- 
trated by some comparative Tables of the duration of life amongst 
the general public at various ages between 30 and 65, and the 
duration of selected lives at various corresponding ages. The 
result shows that while the mortality among persons assuring 
at the age of 45 was only just over 1 per cent., the mortality 
amongst persons who had assured at the age of 30, and had 
continued assured up to the age of 45, was nearly one and three 
quarters per cent. 

" It follows," says Mr. Brown, " that in a Society newly established, where 
135 deaths had been expected, reckoned upon between the ages of 45 and 50, 
and on taking a valuation in the first five years, it was discovered that only 
109 deaths had actually occurred, if the directors or members, who had not 
looked on the subject in the light in which it is here presented, should insist 
upon a division of all the funds which had been accumulated to pay this 
differance in the number of the claims, they would be acting against the in- 
terests and future stability of the Company : for how would they be able to 
meet the claims arising from the increased mortality between the same ages 
after fifteen years' existence ? . . . This point must be carefully distin- 
guished from the expected increase of claims which arises from the advancing 
age of the members. These are duly provided for by the premiums, where they 
are adequate in the first instance, and properly improved afterwards. The 
distinction is most important." 

Mr. "W. Morgan, again, in 1829, after fifty years' experience as 
actuary of the Equitable office, thus expresses himself: — 

" Between a number of select lives and the general of mankind the differ- 
ence in the rate of mortality will, at first, be considerably in favor of the former; 
but this difference will be continually lessening, till, in process of time, it will 
vanish altogether, as it is found to have done, among the lives of long standing 
in the Equitable Society. Should any Institution, therefore, of this kind, in 
the early period of its existence be tempted, by the high probability of life 
among its members, either to reduce its premiums or to adopt any other 
violent measures for impairing its resources, the consequences, though not 
immediate, must ultimately terminate in disappointment and r uin."* 

Dr. Milne (the compiler of the Carlisle Table) after much 
experience, observes : — 

" Although the members of such a Society (as the Equitable) when they 
* A View of the Rise and Progress of the Equitable Society, by W. Morgan, p. 46. 



242 SELECTED AND UNSELECTED LIVES CONTKASTED. 

first enter are select lives, they are not even then so much, better than the 
common average as many persons suppose ; for the more precarious a life is, 
the stronger is the inducement for parties interested in its continuance to get 
it insured, so that bad risks are frequently offered to such Companies. And 
many proposals for insurance are accepted by the Directors that are thought 
very eligible at the time, in cases where they are not aware of any specific 
objection to the life proposed. Besides, it is to be considered that of the 
number in a Society at any one time but a small proportion can have been 
recently admitted, and in a few years from the time of admission the members 
will generally have come down to the common average of persons of the same 
ages."* 

Mr. T. R. Edmonds follows in the same strain : " Assured lives 
represent a better class of lives than the average, and that 
superiority is probably greatest in the first few years, and it 
gradually diminishes. From the Equitable and Amicable expe- 
riences," he adds, " including the first five years of membership, 
the result of the total observations on assured lives agrees closely 
with the last observations of the Registrar-General, on the total 
male population of England for the seven years ending 1844." 

The observations on which Mr. Edmonds bases his conclusions, 
extend, in the case of the Equitable Society, over a period of 66 
years preceding 1829; those of the Amicable Society over 33 
years preceding 1841. In the case of the Economic Society, the 
recent investigations extend over a period of 32 years, viz., from 
1st June, 1823, to 31st December, 1855, and show results more 
favorable than any heretofore deduced from assured life, the 
mortality having been only 90 per cent, of the Equitable Expe- 
rience, 94 of the Carlisle Table, 95 of the Experience Table, and 
but 58 of the Northampton Table ! It must, however, be 
remembered that this latter Office is a rapidly increasing one, 
and that, therefore, the benefit of selection over a large number 
of lives accepted, during the last five or six years, has to be 
taken into account in the comparison. Speaking generally of the 
experience of that Office, the mortality of all ages up to 52 has 
been less than expected by the Tables; f from 52 to 71 greater ; 
and at higher ages equal. 

The results from the Equitable and Amicable Tables, as ar- 
ranged by Mr. Edmonds, show a mortality of 50 per cent, 
greater amongst lives some time selected than amongst those of 
recent selection; or, as he terms it, between "ancient" and 
" modern" selected lives. Referring to some Tables he had pre- 
pared, he says, " It will be seen that in the Equitable, between 
the ages of 40 and 45, the mortality among those who have been 
members less than five years, is 465 out of 10,000 ; among those 
who have been members for more than 15 years, 777 die of 10,000 
in five years, being a difference of full 50 per cent. The figures 

* Human mortality, Encyclopaedia Britannica. 

t The Economic is founded on a Table deduced from Finlaison's Table (Males), the 
Equitable Experience, and Carlisle Table. "It is a Table," says Mr. Downes, the actuary 
of the Office, " better graduated, more mathematically symmetrical, than either of the other 
Tables." 



SELECTION EXERCISED AGAINST THE OFFICES. 



243 



which follow at succeeding ages are nearly the same, and such is 
the case in the Amicable."* 

Mr. E. J. Fai*ren, who has also paid considerable attention to 
this subject, has furnished the following Table of the mortality 
per 1,000 at five ages amongst assured lives, as compared with 
the general population : — 



Age. 


■Among Assured Lives. 


Among the general male popu- 
lation of England. 


First Year. 


First and subsequent 
years. 




30 
40 
50 
60 
70 


6£ 

8i 

14* 

54i 


8f 
lOf 
16i 
31 

62£ 


10i 
13i 

17 

31i 

67 



After enumerating the influence of selection over the first year, 
Mr. Farren concludes that the rates of mortality of persons in- 
sured, " would not particularly differ from those prevailing among 
the male population at large, taken indiscriminately without re- 
gard to health." 

Mr. Higham, by another road, has arrived at similar conclu- 
sions with the preceding writers. His investigations have been 
directed more especially to selection as exercised by the policy- 
holders against Assurance Companies. As the result, he shows 
that the majority of lapsed policies are on the best class of lives — 
diseased policy-holders being always anxious to retain their 
policies : — 

" One is struck," lie says, " with the fact that assured lives are, for some 
time after selection, much, better than the community at large, but that after 
awhile they become much worse. If the comparison be made with a Table 
representing the chances of life in the better classes of society, to which as- 
sured lives generally belong, their inferiority after a short period of assurance 
will be still more strongly exhibited. There can be nothing," he says, " in 
their constitution or circumstances to account for this ; and it can arise from 
no other cause than the selection which the assured exercise against the Com- 
pany by dropping policies on healthy lives, and retaining those on lives which 
have become bad or doubtful. Various writers, who have noticed the inferi- 
ority of insured lives taken in the mass, have hastily concluded that the care 
which the Companies exercise in the admission of applicants fails in its pur- 
pose, through the incompleteness of the information, and the occasional suc- 
cess of dishonest speculators. But," he continues, " if this were so it would 
be apparent from the outset, whereas in the early years after entry the reverse 
is the case. I conclude, therefore, that if we could trace the after-history of all 
who appear upon our books, we should find that they really were, as a whole, 
the select lives we supposed them to be on admission ; that those who dropped 
their policies were those who permanently enjoyed good health, while those 
who had fallen into bad health were careful to retain them." 

Dr. Fan* has clearly arrived at similar conclusions. He said, 
in his evidence before the select committee : — 



* Vide Report of Select Committee. 



244 SELECTION EXERCISED AGAINST THE OFFICES, 

" A man in leaving an Office has this advantage, that he exercises a certain 
option in this way : if he is in ill-health he continues attached to the Office. 
He only leaves the Office if he is in good health, consequently it gives the 
Office an advantage, and raises the state of health if the members continue in 
all cases attached to the Society." 

Whether all the considerations which attach to this portion of 
the practice of Life Assurance have been touched upon, we can 
hardly say. It is particularly desirable that agents should have 
correct notions of the importance of " selection" in the conduct 
of an Office, as there is no point upon which they so frequently 
come in collision with the " powers that be." Every agent is 
naturally (and generally apart from mere considerations of com- 
mission) desirous that the lives he submits to the Office he repre- 
sents should be accepted, and at the ordinary rates : they being 
for the most part from among his relatives or personal acquaint- 
ance, to whom it is exceedingly unpleasant to have to communi- 
cate the fact of rejection, or even of having been " put up" in 
the rates. But in all well managed Offices, unless the agents be 
well up in their business, such occurrences are very frequent, 
arising not from any disregard to the extension of business — a fact 
made patent by the expenditure which most Offices incur to secure 
it — but simply from a knowledge, that unless the lives proposed 
be at least up to the standard of the Mortality Table adopted, the 
acceptance would lead to the annihilation of all profits, if not 
ultimately of the Office itself. Such are the arguments which 
might be lithographed on all circulars announcing the fearful 
edict of a life being " declined." 

But this is not the only lesson the agent may draw from the 
considerations presented in this chapter. Next to the annoyance 
occasioned by the refusal of a life, is that attending the surrender 
of a policy. We will not suppose any agent so unreasonable as 
to participate in a belief often expressed by policy-holders, on 
desiring to surrender, that all premiums paid upon that partic- 
ular policy have been so much gain to the Office. If that theory 
were applied to all the policies in any particular Office, from 
what source would the claims and expenses be provided ? The 
absurdity of the notion constitutes its best refutation. Every 
premium received indicates a corresponding, and, we may add, a 
current liability in respect of some of the existing policies. When, 
therefore, a policy-holder wishes to surrender, this circumstance 
has to be taken into account. The point we are now referring to, 
however, is that of the selection which in all such cases appears 
to be exercised against the Office, and which, if full reliance be 
placed upon the authorities already quoted, is almost sufficient to 
deter Directors from offering any surrender value at all. We 
are not advocating a course of illiberality : for this would, gene- 
rally speaking, be retaliated upon the Office by loss of business — 
indeed we shall presently enumerate liberality in this particular 
as one of the improvements in the practice of life Life Assurance 



THE PKESENT MODE OF SELECTION ASSAILED. 245 

We are simply pointing out the fact, that inasmuch as theory- 
indicates that the best lives only surrender their policies to the 
Office, this fact should account for the apparent indifference of 
Offices to purchase their policies. 

Without pursuing this point further, we may all agree with 
Mr. Higham, that it " is one deserving of very serious conside- 
ration, especially by those who are accustomed to regard lapsed 
assurances as a source of profit. It might," he says, " be so if the 
policies to be dropped were settled by lot / but seeing that a 
power of selection is exercised in opposition to the interests of the 
Company, there is every reason to fear that a loss instead of a 
gain is the result. It is true, a measure of profit is shown upon 
the immediate transaction, inasmuch as the Company are enabled 
to dispose of their reserve in respect of the policies surrendered. 
But this is so obviously done at the expense of the future, that 
one can hardly hear a Company congratulating themselves on 
their large profits from discontinued policies, without being re- 
minded of the man in the fable, who cut open the goose to secure 
the golden eggs" 

Passing on to another phase of the question, the desirability, 
or otherwise, of the present mode of selection, has been much 
discussed by several modern writers. Those who object to the 
method now in practice say, that a very large number of assur- 
able lives are lost to the great majority of Offices. Of course the 
"diseased," "impaired," and "declined" Offices, now so con- 
stantly brought before us, have to some extent remedied the evil. 

" Formerly," says Mr. E. J. Farren, the assurance of lives not 
considered select, was scouted. It was considered unjustifiable 
to takes lives not in perfect health ; but now even the oldest 
Companies have virtually given this distinction up, because they 
declare bonuses without reference to health." 

Mr. Scratchley says, by the present system, " the number of 
assurable lives is greatly contracted, and many persons who, in 
the long run, do not die before their time, are debarred from the 
benefits of Life Assurance. So restricted a system is unnecessary, 
for, if a scale of increased rates were deduced from observations 
of an extensive average of each disease, and applied by a skilful 
medical officer as a guide in each particular case, then a large 
number of apparently unimpaired lives, we believe, might be 
assured, who would be found to yield a return less productive of 
loss to the Society, than a similar number of strong persons 
(assured at ordinary rates) whose self-security in the possession 
of health renders them indifferent and careless of precautions. 
The old saying, " he adds, u of a creaking door lasting longer on 
its hinges, is, by the experience of Assurance Companies, found 
to be true." He thus concludes his remarks on the subject : — 
" We urge, therefore, that the field of assurance should no longer 
be limited ; that inasmuch as Life Assurance is merely the result 
of judicious money measurement of the contingencies of human 



246 SELECT LIVES, AND CONSUMPTION. 

existence, the system may safely be extended; that attempts 
should be made to determine a proper charge for the general 
assurance of lives, however apparently they may have departed 
from the assumed standard of average good health. If this were 
done, we should cease to meet icith aged persons, who tell us of 
their having been declined by such an Office when young." This, 
however, is a point of consideration for the Offices rather than 
for ourselves, and to them we leave it. 

As one of the advantages arising from selection of lives, we 
may refer to a fact on the authority of Dr. Brinton, a physician 
of eminence and examiner to the Mutual Life Office, that the 
deaths from consumption amongst assured lives does not exceed 
one-tenth of the average of such deaths among the whole popu- 
lation, as shown by the Registrar-General's returns. We may 
also note here that the risk of death from consumption decreases 
with advancing age. Dr. Brinton estimates that at 40 half the 
danger is over ; and at 5.0 three-fourths in the male, and four- 
fifths in the female. At 60 but one-fourteenth remains even in 
the male, in whom the liability throughout the whole of life is 
almost one-fourth greater than in the female (5 to 4). 

During the last year or two more attention has been directed 
to the duties of medical examiners of Life Offices, and several 
able pamphlets have appeared. We may mention one by Mr. 
William Hannam, and another by Dr. Brinton. 

Weight is a point to which Dr. Brinton attaches some impor- 
tance. He lays it down as a rule, that an adult male in good 
health, 66 inches in stature, ought to weigh rather more than 10 
stones, or 140 pounds avoirdupois 5 and that for every inch above 
or below this height We may respectively add or subtract about 
five pounds. Towards the close of early adult life, he remarks, 
corpulence generally increases. 

On the subject of insanity, he remarks, that all researches into 
the mortality of lunatics conclusively show that their probabilities 
of life are much less than those of sane persons at corresponding 
ages ; especially from the frequency with which such unhappy 
persons commit suicide; and the numberless chances of accident, 
privations, or exposure, to which the state of their intellect renders 
them liable. 

It is true we frequently hear of lunatics dying at advanced 
ages, but the proportion of these is very small. 

The points we have noted are those of paramount importance 
in regard to selection for Life Assurance. 



CHAPTER IX. 

IMPROVEMENTS IN THE PRACTICE OF LIFE ASSURANCE. 

We should hardly do justice to this division of our subject if 
we were to omit to notice, in some connected form, the various 
improvements which have from time to time been introduced 
into the practice of Life Assurance. Careful inquiry will, indeed, 
show, as we have estimated in our preface, that these are neither 
so numerous, nor exactly of the same character, as those of our 
readers who have only gleaned their information from newspaper 
advertisements, or the prospectuses of individual Offices, have 
been led to imagine. Our comparison, of course, dates from the 
period when Life Assurance became a science : having proper 
data to fall back upon ; or to be more definite, we will go back 
to the period of the publication of the Carlisle Tables. The gra- 
dual improvements in the science have been pretty carefully 
noted in our historical division. 

The desirability of being able to discriminate between real im- 
provements, and those of a delusive and fallacious character, we 
need not stop to dwell upon. It is one of the most natural re- 
sults of competition that it should lead to the assumption of all 
kinds of pretended advantages on the part of individual Offices. 
And it is one of the obvious requirements of Insurance Agents to 
be able to test these pretended benefits, and estimate them for 
what they are worth. How many agents have had to reproach 
themselves that, instead of leading their clients away from dan- 
ger, they have, unwittingly it may be, but none the less fatally, 
induced them to fondle with the shadow and lose the substance ? 
and how many more may yet do so ? So long as the principle 
of Life Assurance can lay claim to the proud distinction of being 
the most extensively applicable, the most prudent, and all things 
taken into account, the most advantageous, of all known invest- 
ments, so long will there continue to be fixed upon it all kinds 
of fallacious schemes for the entrapment of the unwary — and so 
long will those who are sincerely interested in the progress of 
the system have to arm themselves to grapple therewith ! 

We need hardly invoke the stern authority, and still sterner 
experience, of Mr. Taylor, the assistant-registrar of Joint-Stock 
Companies, to proclaim the fact, " That it is a matter of absolute 
certainty that an Assurance Company, founded on unsound prin- 
ciples, must occasion losses at some time or other to the public" — 
yet in the all-absorbing desire for individual benefit, without re- 
gard to the probabilities of the case, how often do we see persons 
enlisting under the banner of the most blatant absurdities, and 
deriding all proffered advice to the contrary. All that we now 
aim at, however, is to qualify our readers to appreciate those 



248 IMPROVEMENTS IN ASSURANCE PRACTICE. 

Offices — whether old or young — which, while offering all the real 
and solid advantages which are consistent with stability and 
equity, promise only what they can fairly perform — and scrupu- 
lously perform all they promise. 

To carry out this object, we shall have occasion to glance at 
some of the pretended improvements which have been introduced ; 
and this, again, will lead us to indicate several points where we 
think further improvements are alike practicable and desirable. 

To proceed then with the improvements already introduced, 
they may be classified as follows : — 

1. More Moderate Rates of Premium. 

2. Substitution of Mixed for Proprietary or Non-Bonus Giving Offices. 

3. Extension of the Limits of Foreign Travelling and Residence. 

4. Modification of Conditions Regarding Deaths by Suicides. 

5. More Liberal Conditions Regarding Surrendered and Lapsed Policies. 

6. Application of Assurance to Diseased Lives. 

7. Lncreasing and Decreasing Rates of Premium. 

8. Allowing Portions of Premium to Remain at Credit in Exceptional Cases, 

9. Loans on Policies for Keeping them in Force. 
10. More Prompt Settlement of Claims, 

I. AND II. MODERATE RATES OF PREMIUM; — NON-BONUS GIVING 

OFFICES. 

The advantages resulting to assurers from the almost general 
adoption of more moderate rates of premium, and the gradual 
substitution of Offices giving a share of profits to policy-holders, 
in the place of some of the earlier Offices which charged extor- 
tionate rates and gave no return, are so obvious that we need say 
nothing more upon these heads than will be found in various 
passages throughout this work. 

III. EXTENSION OF THE LIMITS OF FOREIGN RESIDENCE. 

The extension of the limits allowed for travelling and residence 
in foreign countries, is a great advantage to nearly all classes of 
assurers. The number of persons who are called upon to travel 
to or reside in foreign countries is increasing yearly with the 
growth of commerce,: while the number who seek foreign climes 
for recreation and instruction is increasing with the facilities of 
travelling, and the cultivation of the fine arts. Some idea of the 
extent of the former class may be gleaned from some statistics in 
our Chapter on the Census : as to the .latter class, March is a 
month generally anything but inviting to travellers. The figures 
at page 124 may, therefore, be considered almost at the minimum ; 
for, the events of 1851 tended to draw people to, rather than 
away from, England. 

Formerly these limits were so prescribed that policies became 
forfeited almost before people knew they had transgressed : or 
if permission was applied, the extra premium demanded was 



LIMITS OP FOREIGN TRAVEL AND RESIDENCE. 249 

such as to amount almost to an annihilation of the value of the 
policy. It is not such a very many years since the Norwich 
Union Office announced in its prospectus, " No extra premium is 
demanded for sea-risk for the passage between Dover and Calais, 
or for that between Holyhead and Dublin, provided such passage 
be taken on board his Majesty' 's regular packets/" With im- 
provements in steam navigation these restrictions became abol- 
ished, and it became customary with the Life Offices to allow 
the assured to pass in decked vessels or steam packets, not only 
to the Channel Islands and the Isles of Sark and Man, but in 
time of peace to the several ports in the English Channel, the 
Bay of Biscay, the German Ocean, &c. &c, the most general 
limits being between Texel, at the extremity of Holland, on the 
north, and the French port of Brest, on the south ; and to the 
present day some of the older Offices continue these as their 
limits. These regulations were originally founded upon a belief 
in the uncertainty of risk arising from a change of climate ; the 
extent of this risk not being understood formerly as well as it is 
at the present time. 

But the extension of limits just pointed out by no means meets 
the requirements of the case ; and of this fact many of the best 
conducted Offices are fast becoming cognizant. Hence we find 
some of these Offices allowing their assured to travel to, or reside 
in, any part of British North America ; while several established 
Companies are going still further, and allowing residence in Aus- 
tralia and California (the gold regions in each case most particu- 
larly excepted !) ; also in New Zealand, and, indeed, in any part of 
the world, north of about (varying with the Office) 38 degrees of 
north latitude, and south of 30 degrees of south latitude ; and it is 
but fair to state, that the Scotch Offices have been foremost in 
these liberal arrangements. 

In most of the cases last-named permission must be had of the 
Office, and in some instances the " sea risk" of some few shillings 
per cent, has to be paid by the assured. 

The advantages of these arrangements are, perhaps, more ap- 
parent in cases where policies are held under assignment, and 
where forfeiture of the policy would follow if the life assured 
trespassed beyond the limits. In these days of emigration it is 
by no means unusual — in fact, it has come to be rather custom- 
ary, with those who have not succeeded as they could desire in 
this country, to try their fortunes in other quarters of the globe. 
In such cases the lives are not unfrequently assured for the benefit 
of creditors, and anything which tends to give increased secu- 
rity is of real commercial advantage. 

Of course, in such transactions, the odds must not be all against 
the Offices : hence the mode of conveyance at sea is limited to 
decked vessels and steamers, and there is generally a condition 
restricting such foreign travel to times of peace, — that being un- 
derstood, in its general sense, to imply peace between this coun- 



250 SUICIDES, AND SURRENDERED AND LAPSED POLICIES. 

try and the country named as the destination, but it is clear that 
it must also imply peace between the intervening countries (or on 
the seas) proposed to be traversed. And such advantages as 
those enumerated are very properly limited to bond fide holders 
of the policies. 

In most cases, also, where the limits of travel or residence have 
been transgressed unintentionally, upon notice being given imme- 
diately on the discovery of the fact, either by the assured or the 
holder of the policy, the Office will fix the proper rate for the risk 
incurred, and so prevent the policy from forfeiture. 

The last point to notice under this head is the introduction of 
" whole-world-policies." Under these, by payment of a fixed ex- 
tra premium, the assured may travel to, or reside in, any part of 
the world without risk of forfeiture. In order, however, to obtain 
such policies, the assured has to declare that, at the time of taking 
out the assurance, he has no intention of residing beyond the 
limits ordinarily allowed. Several Offices grant them only after 
a certain number of years of membership. These policies were 
introduced, also, by the Scotch Offices, but we observe several of 
the English Offices are adopting them. 

IV. SUICIDES. 

Formerly, in the event of an assured life dying by suicide (as 
also by duelling, or the hands of justice), all interest in the policy 
was lost to the family or personal representative of the person so 
dying ; although in the case of a person holding under a bona fide 
assignment, death from these causes, very properly, would not 
invalidate the policy, provided notice of assignment had been given 
to the Office previous to the death. The improvement we have 
to note here is that some of the Offices — we think we may say the 
majority of them — are beginning to pay at least some considera- 
tion to the unfortunate families of persons dying by suicide, and 
that the advantage is no longer entirely in favor of strangers. 
The Offices we refer to undertake to pay to the family (where the 
policy has not been assigned) the surrender or Office value of the 
policy on the day before death took place. This value, as we 
shall hereafter see, varies considerably with the duration of the 
policy and the bonus additions made thereto. In all cases, such 
a return is a graceful expression of sympathy with the family, 
and in many it will come in the form of a substantial return. 

This feature is capable of very useful extension.* 

V. SURRENDERED AND LAPSED POLICIES. 

The most permanent and also the most powerful drawback to 
the progress of Life Assurance has been the fear that if, in the 
hour of~adversity, the assured should be unable to keep up his 
premiums, all his previous payments would be forfeited : thus not 

* See Post Mag., 7th August, 1858, p. 253. 



TREATMENT OF SURRENDERED POLICIES. 251 

only thwarting his good intentions, but increasing his pecuniary 
misfortunes. Policies so forfeited are called lapsed. 

Other persons would be induced to assure, providing that they 
were certain of meeting with liberal treatment after the immediate 
purpose of assuring had passed away. Or, as Dr. Farr has ex- 
pressed it, " It oftens happens that persons are deterred from in- 
suring because they lose all command over their money, which 
they may be able to employ more advantageously to themselves 
when the purposes for which they insured are accomplished." 
All obstacles, then, to the payment of a fair surrender value for 
policies proposed to be discontinued seems in the end short- 
sighted policy. The Offices reply that " only the best lives sur- 
render," which may be true, but as even these cannot be retained 
in an Office by unfair usage, it is best to put a good face upon the 
transaction. Mr. Charles Babbage long since asked, "What is 
the reason for thus concealing from the public a fact with which 
it is essential for them to be acquainted, in order to judge of the 
fairness of the terms offered to them ?" adding, " I believe it to 
be more advantageous to make the value of a policy known, and 
its property transferable to the greatest extent," and in such be- 
lief we most entirely coincide. A writer in Taifs Magazine, re- 
ferring to the past state of things, puts matters thus strongly : — 
" Life is not more uncertain to the majority of mankind than in- 
come, and therefore while there was no possibility of securing a 
portion of the premiums paid in the event of the assured being 
unable to continue their payments he merely substituted one un- 
certainty for another." 

Modern competition is now causing the Offices to do what they 
ought long since to have done by right. In the event now of a 
policy-holder being unable to continue his premiums, or being 
desirous of disposing of his policy, he will most likely find the 
Office in which he is assured, if it be a reputable one, prepared at 
once to give him the fair surrender value of his policy ; although 
it must be premised that, unless a person has paid at least three 
annual premiums the Office will hardly be in a position to make 
much return upon any policy. 

We observe now highly respectable Offices advertising them- 
selves prepared to guarantee a return of 40 per cent, on all pre- 
miums paid upon policies of not less than three years' standing. 
In fact none but prudently managed Offices could afford to offer 
such a guarantee, as very few of the extravagant Offices have such 
a proportion as 40 per cent, of premiums in hand at the end of 
three years. 

But in the place of making a return of cash we observe some of 
these Offices have a condition which appears infinitely better : 
they guarantee to give a new policy, free of all future premiums, 
for such a sum as the guaranteed return (treated as a premium 
paid down) will purchase; such policy also being entitled to 
participation in profits. As this point is important to be under 



252 ASSURANCE OF DISEASED LIVES. 

stood, we have drawn an example from one of the prospectuses. 
Suppose a person to have paid £100 in premiums, of which he is 
guaranteed 40 per cent, return — this gives him £40 cash. As- 
suming the assured to be 30 years of age at the time of such an 
arrangement, this £40 would purchase a free policy for £100 with 
profits periodically to be added during the life of the assured : so 
that he would have a free policy for precisely the same amount 
as he had paid in premiums, and hence would sustain no actual 
loss. Of course, the amount of the free policy will vary with the 
age of the assured, and the duration of the former policy, and also 
the conditions of the particular Office assured in. We simply give 
the above figures as a practical example. 

With respect to policies which lapse by oversight, and therefore 
do not come within the meaning of surrendered policies, it was 
formerly customary to be very strict ; but now we find that upon 
proof of good health and the payment of a small fine, the policy 
may be revived in some Offices at any time within three months; 
in others within six months, and in several instances even within 
twelve months. Such arrangements are of great importance to 
policy-holders, for having to take out new policies at advanced 
ages not only occasions an increased outlay for premiums, but 
occasions forfeiture of position regarding bonus advantages. 

VI. DISEASED LIVES. 

The advantages resulting from the application of Life Assurance 
to lives either diseased, or so far impaired as not to come within 
acceptance, as ordinarily understood, are so apparent, that we do 
not intend to dwell upon them. Those Offices which especially 
lay themselves out for this class of business, appear to transact a 
considerable amount of it ; and of late years many Offices have 
devised rates of premium to meet the more frequent classes of dis- 
ease. While, however, this branch of assurance is of great value 
to the public, it requires much care and attention on the part of 
the Offices, otherwise it will end in considerable loss. Offices that 
do much in diseased lives, require very different Tables on which 
to conduct their valuations than those simply transacting ordinary 
Life Assurance. Such Offices arrive at maturity much earlier, and 
of course sustain a heavier ratio of claims in proportion to the 
number of lives on the books. The statistics of diseased lives will 
present results equally uniform with those of healthy lives; but 
they require specially to be studied to be understood. 

In the early days of the Equitable Society it was customary to 
charge not only an addition of twenty-two per cent, on the pre- 
miums " for the extraordinary risque attending the lives of mili- 
tary persons," but also an extra charge of eleven per cent, on the 
premiums, for the " risque of small pox or gout." On the 2nd De- 
cember, 1 802, it was resolved " that the Directors be empowered 
to grant policies of assurance upon the same terms to persons who 
aver in their declaration that they have had the cow pox, as to 



INCREASING AND DECREASING RATES. 253 

those who aver they have had the small pox. But (adds the 
resolution) if such persons shall afterwards die of the small pox, 
such policy shall be void !" Happily such restrictions have been 
long since removed. 

The merit of first introducing the assurance of diseased lives is 
laid claim to by two Offices, viz., the Clerical, Medical, and Gen- 
eral, and the Asylum, both Offices established in 1824. Our in- 
vestigations lead us to believe that the former Office, through its 
founder, Mr. Pinckard, the father of the late manager of the Office, 
was the first to promulgate the idea. Its Board of Directors was 
in fact chiefly composed of medical men, famous in the treatment 
of the several classes of diseases most likely to be presented to such 
a Company. 

VII. INCREASING AND DECREASING RATES. 

An increasing or ascending premium is one which increases at 
a certain yearly rate per cent., according to agreement, at stated 
periods of the life of the assured, as at intervals of five or seven 
years each, instead of remaining fixed for the whole duration of 
life. After the expiration of the time stipulated, usually 14 or 20 
years, the premiums reach a fixed even rate, at which they con- 
tinue during the remainder of the life of the assured. The design 
of this arrangement is to enable those who may be slowly work- 
ing forwards in the world, though with every prospect of success, 
if time be allowed them for the exercise of their talents, to pos- 
sess, at a very low rate at first, the immediate advantage of such 
a Life Assurance as will effectually provide for their survivors in 
the event of premature death. To such persons the ordinary re- 
source has been an assurance for a term of years as regarding the 
smallest outlay ; the rate of premium for a whole life policy being 
too considerable to admit of their securing an amount sufficiently 
large to prove an actual benefit to their families. By an increasing 
premium, however, the whole period of life may be included at the 
same time that the intention of economy is perfectly fulfilled, since 
the highest amount of the annual payments is still lower than the 
rate at which a life of the same age would be assured according 
to the ordinary Office Tables, if the assurance were effected at the 
time when the fixed premium becomes payable. 

A decreasing or descending premium is constituted upon the re- 
verse of this arrangement, and is intended for the benefit of such 
persons as may desire to avail themselves of the activity of youth, 
or a season of present prosperity, by making the largest payments 
at the commencement of the assurance. This species of contract 
is also divided into fixed periods, usually consisting of five years, 
at the termination of each of which the premium is diminished in 
the various proportions exhibited in the Tables issued by the va- 
rious Offices. Each plan has been productive of good, in adapting 
assurance to the wants of the people ; and so far they r,ange under 
the real improvements in Life Assurance. 



254 HALF CREDIT SYSTEM, LOANS, SETTLEMENT OF CLAIMS. 
VIII. HALF CREDIT SYSTEM. 

The plan of allowing some portion of the premiums, generally 
one-third or one-half ] and hence called the " half credit" system, 
has some advantages, but is only admitted here in a qualified 
sense, as we fear the disadvantages, resulting from the indiscrimi- 
nate use, or abuse, of the plan have gained the ascendancy. Ex- 
ceptional cases do arise where such a plan is of immense advan- 
tage to the assured : but it should be confined to these exceptional 
cases. In almost every instance where a man commences with the 
half-credit system the increasing-premium plan would be found 
more really advantageous. The subject will be resumed again pre- 
sently, so we now leave it by remarking, that many of the exist- 
ing Offices which have tried the plan and have not found it answer 
— as, indeed, it could hardly be expected to do when indiscrimi- 
nately applied — might, by proper limitations, render it serviceable 
to themselves and their customers. 

IX. LOANS WITH LIFE ASSURANCE. 

Most of the foregoing remarks would apply equally well to this 
section. Loans upon life policies, like credit for the premiums, 
should only be had in exceptional cases, and then the accommo- 
dation would become valuable. They should only as a rule be 
made for the purpose of keeping the policy in force. To raise 
money on a life policy is to mortgage a man's good intentions. 
The benefits under such policies are supposed to be for the widow 
and the orphan. If temporary pecuniary assistance be the only ob- 
ject of the person assuring, a life policy is not generally the most 
desirable form of security ; although in most cases it is collaterally 
advantageous. We must only therefore be understood to speak 
of the advantage of loans in connection with Life Assurance in the 
limited sense of their being granted for the purpose of keeping the 
life policy in force, or for some equally obvious good. 

X. PROMPT SETTLEMENT OF CLAIMS. 

The more prompt settlement of claims we hold as a decided 
improvement in the right direction. Formerly it was customary 
for six montns to intervene, not simply after death, but after proof 
of death.* Now we are glad to see the Offices coming to three 
months ; and hope to see the period yet further curtailed. "We 
are aware that some time must elapse to enable the Offices to 
make proper enquiries so as to protect themselves from fraud : 
but in these days of rapid locomotion and communication, as many 
weeks will now do as months were formerly required. Most Of- 
fices, indeed, will pay the money short of the stipulated time upon 
having a discount allowed : but where the money is required for 
the support of a needy family — and in such cases promptitude of 
settlement is most urgent — every pound abstracted from the fund 
appears to- us a perversion of its proper purpose. 

* The requirements in proof of death will he fully explained hereafter. 



CHAPTER X. 

PRETENDED IMPROVEMENTS IN THE PRACTICE OF LIFE 
ASSURANCE. 

We now come to speak of the pretended improvements which 
have been introduced into the practice of Life Assurance, several 
of which, by reason of the prominent attention that has been 
drawn to them, will require to be pretty fully discussed. The 
subjects to be considered under this chapter may be thus 
arranged : — 



1. Immediate Indisputability oj 

2. 2 he indiscriminate use of the " Half-credit" plan. 

3. Loans on Personal Security. 

4. Educational Funds, Misfortune and Indigence Funds, Reading and 

News-rooms. 

As several of these are points in practice upon which there 
may be some diversity of opinion, we have taken the precaution 
of calling several authorities to our aid. 

I. IMMEDIATE INDISPUTABILITY. 

First amongst the pretended improvements must most assuredly 
be placed that of the immediate indisputability of policies. By 
immediate indisputability we mean the guaranteeing of policies 
as indisputable from the time the first premium is paid. This 
definition it is important 'to bear in mind. No doubt it is an 
attractive thing to have the possession of one's property guaran- 
teed, whether it be simply an umbrella, or a watch, or a life 
policy. It is, indeed, a fundamental law in all civilized nations 
that a man's property shall be guaranteed, with one very simple, 
but at the same time very important proviso, namely, that he shall 
have come by it honestly. If it were not for this simple and just 
proviso might would be constantly warring against right: the 
pickpocket would be calling upon the law to aid him in retaining 
his gains ; and the swindler would exercise his vocation with 
impuuity ! Now, those who first introduced indisputability into 
Insurance contracts, instead of astonishing the world by the 
grandeur of the idea, proclaimed to all thoughtful people how 
little they really knew of the business they had undertaken. 
When the Assurance contract was first propounded, it was seen 
that inasmuch as the Office lays heavy odds against the premium 
paid by the assured, it was of the first importance that its mana- 
gers should be in possession of true representations on all 
material points on Avhich the contract was based : hence the 
penalty of misrepresentation was made no less than the entire 



256 THE LAW OF ASSURANCE CONTRACTS. 

forfeiture of all benefits under the contract. Now if a person 
will calmly look at all the circumstances there is nothing very- 
unreasonable in this. No doubt there was the fear that some 
disreputable Companies might act upon the letter rather than 
the spirit of such an understanding, and by taking advantage of 
unintentional errors defraud the public of their rights — and un- 
fortunately such cases did arise. But seeing the inducements 
the public has, in many instances, for withholding correct in- 
formation, the abuse was far more likely to be on the other side : 
indeed, it is not too much to assert, that where one instance can 
be named of a Company attempting to defraud the public, a 
thousand instances could be named the other way. 

Lord Mansfield has well defined the relative positions of the 
assured and the assurer, and will be found fully to support this 
view : — " Insurance," he says, " is a contract on speculation, and 
therefore the special facts upon which the risk is to be computed 
lie chiefly in the knowledge of the assured only. The insurer 
trusts to his statements, and proceeds, upon confidence, that he 
does not keep back any circumstance within his knowledge to 
mislead the insurer into a belief that the circumstance does not 
exist. The keeping back, therefore, of such circumstance is a 
fraud, and the policy becomes invalid, because the risk run is 
really different from the risk understood and intended to be run 
at the time of the agreement." No one can dispute the correct- 
ness of this reasoning. 

We are by no means wishing to place obstacles in the way of 
those who mean honestly to the Offices : it is obviously short- 
sighted policy to attempt this. When a person contemplates any 
step so important for those depending upon him as the assurance 
of his life, if he has correct business notions, he will not deem it 
time or labor ill-spent to satisfy himself correctly on all the 
material points affecting his family history :* and if he do this, 
and make his return conscientiously, he may rest perfectly satis- 
fied hereafter; providing he has selected a respectable Office to 
start with. Those who are at all conversant with the working 
of Life Offices need not be told that, " thousands sterling are 
annually paid away by the established Offices to claimants under 
policies in which clerical errors, accidental mis-statements, and 
trifling discrepancies in age are discovered only at the time of 
making the claims, and are then set right."f In fact, it may be 
broadly stated, that in the present day no Office can afford to be 
otherwise than liberal and equitable in these particulars: the 
public is, therefore, safe. 

But to come nearer to the question of indisputability, it has 

* " The law holds that the keeping back of any circumstances connected with the 
health or habits of the life assured is a fraud, and that the policy becomes, in consequence, 
invalid. Although the suppression should happen through mistake, without any fraudulent 
intention, still the Office is deceived, and the policy invalid ; because the risk run is really 
different from the risk understood, and intended to be run at time of the agreement."— Vide 
Beaumont on the Law of Insurance. 

+ Beaumont on the Law of Insurance. 



INDISPUTABILITY DISCUSSED AND DISPUTED. 25*7 

been used as a party cry for party purposes. There was much 
that was popular in appearing to remove the remnant of security 
the Life Offices still held over their contracts, and to give the pub- 
lic its own way entirely. To do this effectually, however, it became 
necessary to conjure up all kinds of imaginable difficulties and 
disputations occasioned by the Offices. Pictures of desolate 
widows and unrelenting Directors were placed in glowing con- 
trast — the moral being, that " we, the virtuous Offices, make no 
difficulties about paying — we pay everybody everything under 
every circumstance." It was not long before the chief of the clique 
of Offices which raised this cry had an opportunity of putting all 
its pretensions to the test; the upshot being a verdict against the 
Office under circumstances from which any properly constituted 
Society might have escaped — heavy law expenses — a lesson to 
the public to place no reliance in such ill-founded projects, and 
lasting disgrace to the Office concerned. Here the matter migh". 
have ended, but for the discovery, in other quarters, that under 
proper restrictions indisputability might be turned to good 
ac count. 

The obvious objection to the immediate indisputability of poli- 
cies is, that it offers a direct inducement to fraud. If a trades- 
man should suspend over his door a notice that he would not 
prosecute those who should succeed in passing spurious money 
upon him, he might fairly expect that no amount of vigilance on 
his part would entirely protect him from loss. If the loss fell 
upon him personally, perhaps no one else would have business to 
complain, except as against an act offensive to moral government ; 
but if the loss was transmitted through him to his creditors, then 
they would have just cause to complain of the absurdity, not to 
say, under such circumstances, the illegality of his act. Now 
this brings us to the position of an Assurance Office. The surplus 
funds of a Mutual Office, and the greater portion of those of a 
Mixed Office, belong to the members, by way of return for their 
excess of premiums. Hence, if the Directors place these in peril 
by any unguarded act of their own, they commit a wrong upon 
the whole body of members. It is therefore no matter of special 
pleading to say, that the objection to immediate indisputability 
is, that it enables a dishonest member to rob all those who are 
honest. If a man, by fraudulent representations, secures a policy 
containing a clause to the effect that the possession of such policy 
shall be deemed conclusive evidence that the claim thereunder 
shall be paid — which is the usual condition in such policies — and 
that guarantee be worth any thing at all, there is an end to all 
fair dealing for ever thereafter. The inducements to misrepre- 
sent the facts are already, by the very nature of the contract, 
far too strong — is there any good and sufficient reason for in- 
creasing them ? We believe not ; and all who have thought 
much upon the subject appear to have arrived at the same con- 
clusion. 



258 INDISPUTABILITY, AND THE HALF-CREDIT PLAN. 

Mr. George Isabell Soper, in his pamphlet Life Assurance Offi- 
ces : their National and Social Advantages, <&c, takes a tho- 
roughly practical view of the case : — 

" It is no secret that fraud on the Offices is often attempted to be practised 
by designing and unprincipled persons, and the occasional success of such 
frauds has no doubt had the natural effect of exciting suspicion, in cases 
where positive proof of imposition was not to be obtained. Still it can hardly 
be doubted that, without such positive, or clearly circumstantial evidence, it 
would be better for the general interests of the Office that it should pay the 
money than contest the case. Nevertheless, it must not be forgotten that 
every successful imposition wrongs the honest assurer, whose security or pro- 
fits in the Mutual, and bonuses or participations in the Proprietary (Mixed) 
Companies are more or less affected thereby. That wrong really extends to 
all who are assured in the same Office, whatever its standing or description, 
so that, in point of fact, when imposition is successfully practised on the Office, 
it is practised on the saving assured. Every individual concerned in such Of- 
fice is therefore interested to detect imposition, and to see it exposed and 

PUNISHED WHEN DETECTED." 

Considering, then, that it is shown that immediate indisputa- 
bility is unsound in theory and untenable in practice, it naturally 
occurs whether any modification of the plan may be devised free 
from the great bulk of the objections already pointed out; and 
we have no hesitation in admitting that such is the case If a 
policy be obtained by means of fraud, the probabilities are that 
it is intended to become an early claim : hence suspicion generally 
attaches more particularly to policies in their earlier years. If 
things go on pleasantly for some time, a species of good faith be- 
comes established between the Office and the assured ; and even 
if any fraud was intended a combination of favorable circum- 
stances may have warded it off. Acting upon this belief we pre- 
sume, we observe a number of respectable Offices now issue 
policies guaranteed indisputable and unchallengeable, after they 
have been some Jive or seven years in force. This can hardly be 
said to imply that any policies becoming claims within these 
periods are to be disputed. It leaves them open to investigation, 
and if upon such investigation suspicions arise, the Office has 
only one course in justice to pursue ; and that is, to protect its 
members and its funds. 

We believe that if the Offices give way to the public notion of 
paying all claims, whether just or otherwise, that so far from aid- 
ing the progress of Life Assurance the tendency will be the other 
way. The honest will not contribute money for the benefit of 
the dishonest ; and in the long run, the course of even-handed 
justice is the course of prosperity. The use of the principle of 
indisputability, within proper limitations, will be found produc- 
tive of good. The abuse of it, as already instanced, is productive 
of evil, and should be discontinued. 

II. THE HALF CREDIT SYSTEM. 

We have already classed with the improvements in the practice 
of Life Assurance the feature now adopted by many respectable 



EVILS OF THE HALF-CREDIT SYSTEM. 259 

Offices of advancing money for the purposes of keeping their 
policies in force ; but between that and the systematic lending of 
money upon policies there is all the difference in the world, and 
it is this latter system that we deprecate. When a man has 
made an effort to provide for his family by means of Life Assur- 
ance, and adversity overtakes him and cuts off his means of pay- 
ing the premiums, it amounts to an act of benevolence to furnish 
him with aid to accomplish his purpose, even although the funds 
so provided must eventually come out of his own pocket. But 
when a man is induced to assure his life under the plea that a 
considerable portion of the premiums will be lent to him for the 
purpose, unless it be pretty clear that his financial position will 
ultimately admit of his discharging the obligation he incurs, and 
of reserving the policy for the benefit of his family, the chances 
are that not only will no good come out of the transaction, but 
that the person so induced to assure will be positively injured : 
hence the assurance principle will be brought into disrepute. 
We are writing with a knowledge of such cases before us, and 
they are directly chargeable to the half-credit system. 

A popular writer, whom we have before quoted, well observes — 

" When an Office announces that it is willing to leave a part of the premium 
in the assurer's hands, on his paying interest for it in advance, the Office in 
the meanwhile holding the policy as security, what is it but enticing a person 
to assure for more than he can afford to do, and to borrow money for the pur- 
pose of paying the premiums ? The Office may with caution make itself 
secure ; but it throws upon the customer the strong probability of future 
disappointment. When the time comes for thinking of the repayment of the 
advances which the Office has virtually made, the assurer will frequently find 
himself obliged to sell that policy to the Office, which he had counted upon 
for the benefit of his family. Now out of the purchase money [for the policy] 
must be deducted the sums in arrear to the Office (upon which interest has 
always been paid in advance) ; and when the assurer comes to put his balance 
against what he has actually paid, he will see that he never did a more impru- 
dent act. The Office is not to blame for anything, but having thrown the 
original offer in his way ; they have only lent him money on the same terms 
as they would have lent it to others ; and they may say, and truly, that it icas 
his own fault if he engaged in an imprudent speculation. But," the writer 
asks in conclusion, " is it not, then, a fault to entice others to imprudence, 
knowing how much more easily men are induced to be imprudent than to be 
prudent ?"* 

We reiterate the enquiry, and ask the reader to reflect before 
he gets led away by the delusions of the " half-credit system." 

Another writer takes a still more unfavorable view of the case, 
and shows that the system may in some instances tell not only 
against the assurer, but against the Office assuring. He, however, 
assumes that the interest upon the premiums left at credit is to be 
allowed to accumulate, in addition to the premiums, thus putting 
the calculation upon compound interest. This is not generally 
the plan pursued, as in most cases the interest on the portion of 
the premium remaining at credit has to be paid in advance when 

* National Cyclopaedia. 



260 ITS EFFECT AGAINST THE OFFICES. 

the other portion of the premium is paid. This does not really 
improve the position of the assurer, for in process of time the 
interest upon the arrears will amount to as much as would make 
the full premium, and still there is a heavy charge on the policy 
in the shape of arrears. In such a case the position of the Office 
is better than that shown in the following- example, whatever the 
position of the assurer may be. But the writer must state his 
own case : — 

" Amongst the many blatant absurdities, which at the present day are 
offered as baits for business, we do not hesitate to place very prominently in 
the list the scheme of allowing a portion (often a very large one) of the pre- 
mium to stand over at compound interest until death. A very brief example 
of the operation of this apparent boon, as regards the individual who really 
intends to effect an assurance, will convince him that it will be in the last 
degree impolitic in him to accept the offer, and an equally brief example of its 
operation, as it affects a Society when a merely commercial assurance is intended, 
will, we imagine, satisfy any thinking person of the probably dangerous 
consequences to which it leads. First, as regards the assurer. A party, aged 
about eight-and-thirty, would, at the generality of Offices, be required to pay 
an annual premium of about £3 per cent, for the assurance of his life — assume 
the assurance to be for £1,000, and it would seem to the assurer no small boon 
were the Office to consent to receive from him £10 per annum only, instead 
of £30 per annum — the difference to be charged at compound interest on his 
policy, and deducted at his death. Now, should the Office charge him (as 
many do) £5 per cent., in the course of about five-and-twenty years the asto- 
nished assurer, who had, as he imagined, provided for his wife and children, 
would be informed that his policy had wholly vanished ! — his debt to the 
Office, for premiums in arrear, having, by that time, amounted to the sum 
assured ! Now, as regards the mischief (if any) to the Office it would seem, at 
a hasty glance, that if this plan be inj urious to the assurer, it must, e contra, 
be advantageous to the Office, but it is not so : like the assagai of the savage, 
it carries poison at both ends. We have taken the example of the father who 
assures his life for the benefit of his family, and we will now take the case of a 
creditor, who assures his debtor's life for his own protection. If the debt is to 
be repaid in five or seven years, it is far cheaper to take a policy for the whole 
term of life on the mischievous principle we have been discussing, in the pro- 
portion of about 2 to 3, than to effect a merely temporary assurance, more 
especially as when the debt is paid the creditor may, if the life assured is 
then impaired in health, keep up the policy by merely paying up arrears. As 
a general principle, no more of any premium should be allowed to fall into 
arrear than the difference between the premium for the whole of life and the 
temporary premium, and this is not always safe /"* 

Mr. Scratchley also, with great show of reason, takes side 
against those who believe the half-credit system to be highly 
profitable to the Offices adopting it : — 

" This system," he says, " is now very generally in use ; hut we desire to 
caution the Directors of Companies against misconception of the advantages, 
which their institution may derive from it. They should understand that they 
cannot allow its application. 1st, unless the half premiums paid, added to 
the interest on the half premiums in arrear, exceed, on the average of seven 
years, the rate payable for a seven years' term policy .... The prin- 
ciple would, of course, be most advantageous to a high-rate Society, hut not 
equally safe or desirable for one proceeding upon a system of low premiums. 
y ... By way of caution, we would remark that any Assurance Society, 

* Iafe Assurance— Its schemes, &c. 



ITS EFFECT AGAINST THE OFFICES. 261 

to be secure, should, at least, receive from each member such a premium as, 
collectively, would pay current claims and expenses, independently of affording 
reserves for the future ; and strictly speaking the system is only advisable and 
safe for a young Society, where it possesses a sufficiently large protective capital, 
and where the privilege is allowed for a limited term of years, as seven or less. 
For a Company with a small paid-up capital to permit a longer extension of the 
half premium assurances would be analogous to a Society transacting ordinary 
business, but investing the greater part of its money in unavailable securities. 
As an axiom of finance," he adds, " the Directors of an Assurance Society are 
bound to invest only a small portion of their funds, as from time to time 
received, in securities not readily convertible into cash. So acknowledged is this 
that it is customary for actuaries to take care that the amount invested in the 
public funds shall always keep pace with that lent out on land mortgages or 
other similar security." 

Mr. J. J. Downes pointed out to the Select Committee on Assu- 
rance Associations, that " if the Office can afford one assurer to 
leave one half his premiums in arrear, it ought to have enough in 
hand to pay the other assurers one half, and they could not do 
it." In fact, although the system is now adopted by most Offices, 
and many have applied it extensively as a means of extending 
their business, we cannot at this moment recall a single writer of 
any note who has attempted to justify it. Those who have 
thought most upon the subject have seen cause to condemn. 
Even the champions for the young Companies, who grow elo- 
quent upon some of the supposed improvements in modern assu- 
rance practice, pass quietly over the " Half Credit" plan. Mr. 
Scratchley boldly launches his shafts at it again and again with 
success — 

" Theoretically, and on 'paper" Mr. Scratchley says, " it might be made to 
appear that not only half the premiums, but even a larger proportion might be 
withheld for more than seven years with increased apparent advantage to the 
Society, from the higher rate of interest, at which the money woidd seem to be 
laid out, than that credited to assurers in the tabular calculations ; but the law 
of mortality is in operation all the time, and while the nominal assets of the 
Society woidd appear to be in the most satisfactory condition, deaths would 
occur, and the actual available funds would not be sufficient to meet the claims 
to which they woidd give rise. Such a business can, in fact, be only under- 
taken by young Societies when they have a considerable paid up capital . . . 
One more remark in addition : The half premium plan (although a conve- 
nience to the assured) does not give a young Society all the advantage which 
it has a right to expect. It would only do so if 5 per cent, interest were the 
limit of the advantage that the Directors could obtain from the investment of 
that portion of the Society's funds which is not intended to be placed in im- 
mediately convertible securities. Such is, however, not the case. For every 
£100 invested on land mortgage or similar security, an additional policy of 
assurance can be obtained, and a fresh source of profit created. A young 
Society is, therefore, best off, when receiving the tohole premiums upon its policies, 
and so enabled to lend out a portion to induce the affecting of new assurances. 
Of this benefit, however, it is deprived by consenting to the half premium 
system. Nevertheless (he adds) to meet the public requirements, we are of 
opinion that it should be adopted, with the limitations previously referred to.'* 

We have but little to add. If the Offices have not the moral 
courage to discontinue this pernicious system, we hope agents 
will have the fairness to dissuade their friends from falling into 



262 LOANS ON PERSONAL SECURITY. 

the snare. We venture to assert, that not more than one policy 
in three, taken out under this plan, is kept in force after the first 
few years ; and a person who is deceived and disgusted in this 
manner, is neither likely himself to assure again or to recommend 
his friends to do so. Of the two, it is far better generally to 
commence with a higher payment, decreasing as age advances; 
but nine persons out of every ten prefer the even rates through 
life, and should be recommended to adopt them, unless special 
financial or business reasons render some other course really de- 
sirable. The evil consists entirely in the part credit plan being 
held forward as an inducement to persons to assure, instead of 
simply being employed as a means of temporary aid to those who 
have already done so. 

III. LOANS ON PERSONAL SECURITY. 

The system of granting loans on personal security, in connection 
with Life Assurance, has now become so common that many of 
the new Offices seem almost specially to lay themselves out for 
it ; and such announcements are nearly the first that catch the 
eye in many of the prospectuses we have perused. We make no 
apology for quoting the following remarks upon the money-lend- 
ing system, and what it may lead to. We observe, indeed, re- 
cently that one, if not more, of the Assurance Offices has taken 
up the business of bill discounting, and probably will be more 
safe than dabbling with patched-up personal security, as many 
Offices do. How far assurers may care to have their funds sub- 
jected to the hazard of bill discounting is a point for them to de- 
termine, and not us. Here is the quotation referred to :— 

" It is more especially necessary to guard the public against the money- 
lending Companies. It is a well-known fact among those conversant with 
these matters that while many of these Offices would find it impossible to ob- 
tain business without some illegitimate efforts, they ham changed their Com- 
panies from Insurance Offices into Loan Societies, lending money on securi- 
ties which would be refused by all other capitalists, and ekeing them out by 
policies of insurance in their own Offices. These securities are very often, 
even with Companies who would be sorely angry were the fact made known 
to the public, nothing more than personal securities, such as the bond of the 
assured or borrower, and that of two of his friends, the policy being taken out 
for a much larger sum than would cover the loan. Of course the interest in 
such cases is high, and also the prospective interest, and hence some of the 
astonishing bonuses given by some of the new Offices to their small policy- 
holders. But how dangerous is the principle ! What, let me ask, would be 
the position of such an Office if any great crisis should arrive, such as that 
which followed the financial measures of 1849, when in every quarter confi- 
dence was shaken, and credit all but universally destroyed ? And are we 
never to have such a season of distress ?"* 

The changes of the last few months have swept away a great 
many of these money lending Offices. It is to be hoped those 
that still exist will speedily set their houses in order, and carry 
on the business of Life Assurance with due regard to those prin- 

* Life Assurance— Its Schemes, &c. 



EDUCATIONAL AND MISFORTUNE FUNDS. 263 

ciples which have already stood the test of experience, and which 
alone seem destined to lead to nltimate success. 

IV. EDUCATIONAL AND MISFORTUNE FUNDS, &C. 

Within the last few years other novelties — scarcely to be 
called " new features " — in Life Assurance, inasmuch as they have 
nothing whatever to do with it, have been introduced. These 
consist in promising to set apart some portion of profits, such as 
one-tenth, for the purpose of forming "Educational Funds," and 
funds out of which to provide for the unfortunate, or it may be 
improvident shareholders and assurers. To such funds as these, 
there can be no possible objection. Indeed, we might wish there 
were more of them ; but what connection they have with Life 
Assurance we cannot divine. It must be remembered, that if 
one-tenth of the profits are applied to either of these purposes, 
there will be less by so much for other purposes; and is it not 
much better to return to assurers the surplus which properly be- 
longs to them, either in the shape of extending the benefits of Life 
Assurance, by increasing the sums assured, (by reversionary bonus 
additions,) or in cases where it may be preferred, in lessening the 
annual payment required to keep an insurance policy afloat ? Or 
would it not be even better to give each assurer his proportion of 
the surplus in cash, to be expended in any way he may think 
proper, rather than to make a " lottery " of a portion of the surplus, 
by applying it to purposes where there must of necessity be but 
few prizes, and many blanks. We do not intend these remarks to 
apply to Societies or Offices established for any special class of 
individuals, such as clergy funds, &c. We speak of the folly of 
Offices professing to do general Assurance business with all 
classes of persons holding out such baits to the public. 

The following remarks on this subject are in print, and their 
authorship demands for them careful consideration : — 

" One of the new Offices proposes to set aside a portion of its future profits 
to provide schools, &c, for the education of the children of its members. 
This smacks of the philanthropy of the grocer, who, while he professes to 
sell you his sugar one penny per pound cheaper than his neighbor and rival, 
remits you the penny in Scotch Snuff ! ! ! It were wiser and equally philan- 
thropic to give to the assurer his share of the profit, to be expended in his 
own objects, and in accordance with his own judgment. But there is another 
equally laughable, but at the same time more reprehensible promise — repre- 
hensible, because it is one which it is impossible to realize. We allude to 
the promise held out by one of the modern Offices, to set apart a portion of its 
future profits, whether such should amount to thousands or tens of thousands, 
to hundreds of thousands or to millions, for the support and future provision 
of any person in decay, who shall have once, for however brief a space of time, 
held a single share in such Company. To use the very words of the pros- 
pectus, to become a shareholder in the is, as it were, to effect at once 

and for ever a policy of assurance against want ! Proh pudor ! Did not the 
crimson blush of shame mantle on the cheek of the writer who penned that 
paragraph. In our mind's eye we can picture the commotion created by this 
project on the Stock Exchange — that is if its incredulous members could be 



264 CONSEQUENCES OF PUBLIC IGNORANCE. 

"brought to believe in the possibility and in the soundness of the scheme. What 
time bargains ! ! A to B; B to C ; C to D; and so on through the entire 
range of the alphabet, every transfer carrying with it ' an inalienable unat- 
tachable intact right/ to be preserved from want in this newly-found El Do- 
rado. If the prospectus mean anything, it means this, and if it do soberly so 
mean, we do not hesitate to pronounce it — simply impossible."* 

We shall not be speaking too strongly if we exclaim with Dr. 
Price, as to this and all similar schemes, " it is public ignorance to 
which they appeal." Ignorance of what really can be done leads 
people to form exaggerated notions, or at all events to put faith in 
plausible pretences : and these it falls to the lot of agents to com- 
bat with and remove. 

* Life Assurance— Its Schemes, &c. 



CHAPTER XL 

FURTHER IMPROVEMENTS DESIRABLE. 

We intimated that we might probably offer a few suggestions 
regarding further improvements in the general practice of Life As- 
surance. These will be very short, and may be classed under the 
following heads : — 

1. More Prompt settlement of Bona-fide Claims. 

2. More Liberal Conditions regarding Deaths by Suicide. 

3. The Substitution of Unchallengeable or indisputable Policies after an 

Assurance has been in force sufficient time to establish good faith. 

4. Substitution of Lives. 

We have in part anticipated these suggestions in our previous 
remarks, and have also been in part anticipated by several Offices, 
which have, to some extent, adopted the improvements noted. 
We therefore here refer to them, with the hope and belief that in 
time, they will come into general practice by the more substan- 
tial Offices, which, by being backward in the adoption of real 
improvements, frequently give less worthy rivals advantages 
tending to place them on a better footing with the public than 
their general merits entitle them to. 

I. SETTLEMENT OF CLAIMS. 

With respect to the more prompt settlement of bona-fide claims, 
we have nothing to add to our remarks at page 254 except that 
we should wish to see all the Offices fall into the plan. 

II. DEATHS BY SUICIDE. 

We think there is room for more liberal co'nditions with respect 
to deaths by suicide, and even with respect to duelling, if not as 
to deaths by the hands of justice, which are happily rare amongst 
the classes who most assure in the country. If the Offices feel 
bound to pay claims under assigned policies, where death takes 
place by either of the above modes, — and if they did not do so 
the mercantile value of life policies would be considerably les- 
sened, — does it not seem fully within the benevolent scope of 
Life Offices to grant the same liberality to those by whom such 
liberality is too frequently far more needed — we mean the wives 
and children of the unfortunate persons dying by such means ? 
We do not overlook the fact that, unless proper precautions be 
taken, the Offices might be greatly defrauded. Nor do we overlook 
the circumstance that such deaths as these are included in the 
general mortality returns of the kingdom, and most probably in 
the select or special returns upon which some of the Tables in use 



266 INDISPUTABILITY MODIFIED. 

are based, so that there can be no plea on the ground of prejudi- 
cially affecting the mortality expected by the Offices. The pre- 
cautionary condition might be that a policy should have been 
in force for one or two years, before the occurrence of the event 
producing death, with a further protection that if any proof of 
design upon the Office was adduced payment might be resisted, 
and the premiums returned in the manner now frequently pur- 
sued. Two years seems to be a sufficient period for the policy 
to be in force in order to bring it under such a provision, and we 
are glad to see a movement in this direction. 

III. INDISPUTABLE POLICIES. 

If our previous remarks have had the tendency to make our 
readers believe that we are at all adverse to giving honest assurers 
every possible guarantee for the prompt and ready settlement of 
the claims under their policies, the sooner such a belief is dispelled 
the better. We protest against a system having a tendency to 
cause honest assurers to suffer from the acts of dishonest ones ; as 
also against holding out any encouragement for abusing Life As- 
surance, by dishonest practices ; and finally, against Offices taking 
up and advocating principles which they find and know to be in- 
expedient, if not impracticable, to carry out. But knowing that 
the great majority of fraudulently obtained policies are intended 
to, and do become early claims, whereas, with ordinary policies 
but a small proportion become claims in early years ; and also know- 
ing that Assurance Agents and Offices have many more oppor- 
tunities of hearing the true state of the health of an assurer after 
he is assured, than at the time of assuring, when perhaps he is an 
entire stranger to the agent and the medical examiner, we do 
think a period arrives when something like good faith may be 
assumed, and when policy-holders may have, and ought to have, 
every security the Office can afford. Those who have seen much 
of the practice of Assurance, will see the force of our remarks, and 
several Offices of high standing have anticipated them, by issuing 
unchallengeable or indisputable policies after periods of five or a 
greater or less number of years. Five years occurs to us as a 
reasonable time for confirming a contract, found up to that period 
to be honorable, although the details may be well left to the 
Office and the assurers to adjust. It is the principle we advocate, 
and we hold it to be far before any other species of indisputability 
which has yet been offered, both for the interest of the Offices and 
assurers. It would not follow, that because policies had no in- 
demnity of this kind for a period of five years, that all claims 
which happened in that interval would be disputed. The same 
practice that now obtains in such cases would still continue ; but 
Offices, by the means we advocate, would, as soon as they could 
do so with safety to their funds, and the general body of assurers, 
give every possible guarantee that can be required, in addition to 
that which now exists, for the due performance of all their engage- 



SUBSTITUTION OF LIVES CONSIDERED. 267 

ments. The subject deserves consideration by the Offices which 
have not yet made a move in this direction. 

IV. SUBSTITUTION OF LIVES. 

We include this as amongst the improvements yet to be made 
— that is to say, to be made general ; for at present but one or 
two Offices only name it in their prospectuses. If accompanied by 
strict medical examination, the interests of the Offices would not 
be prejudicially affected, over an average of cases, by allowing sub- 
stitution of lives. We leave it, however, to Mr. Scratchley, who 
has urged the plan with considerable force elsewhere, to make 
good the case here. He gives the following examples of its 
value, without, as he asserts, inflicting loss upon the Offices. 

" Suppose a gentleman in the army, having effected an assurance upon his 
life in time of peace, to be required afterwards to enter upon remote or active 
service. If lie wish to avoid an increase of premium, and be in the full con- 
fidence of his health, he may prefer at once to give his policy to a younger 
brother or friend at the death of whom the amount assured would be paid ; 
and yet he may retain to himself, by mutual agreement, some interest in the 
policy so transferred. Again, suppose a creditor to have effected an assurance 
upon the life of a debtor, as collateral security for a loan, which is afterwards 
paid off, so that the creditor has no longer any interest in keeping up the 
policy ; or suppose a person to have borrowed money on mortgage from a 
private individual or a Society, and to have assured his life, so as to secure his 
family from liability for the debt, in case of his decease before he has paid it 
off ; in both these cases the transfer principle would be at once susceptible of 
advantageous application, as the power of transferring the assurances from 
their own to other lives would allow of the policies becoming serviceable to 
other parties for similar commercial purposes ; and the premiums paid by the 
original assurers would, thus, not be entirely lost, when their desire to keep 
the policies up for their own respective benefit had ceased, as the assurers or 
the substituted lives would find it advantageous to pay an equitable sum for 
the transfer." 

Looking, however, only at one simple fact, namely, that selec- 
tion is held to be beneficial to the Office, it appears to us that the 
substitution of lives, accompanied as it is with the right of selec- 
tion in such case, gives the Office a decided advantage in this 
particular ; and hence we announce the point as at least deserv- 
ing of the careful consideration of those who have the manage- 
ment of Assurance Offices. 

By way of sequel to this and the two preceding chapters, we 
may notice a point which has been a good deal discussed at 
various times, namely, the propriety or otherwise of uniting the 
business of Life and Fire Assurance in the same Office. Of the 
propriety, or rather the want of it, of making the funds of the 
one branch liable for the losses of the other, there cannot be two 
opinions : indeed, no Company can obtain a special Act of Parlia- 
ment where such a custom prevails. In most cases now-a-days 
where the businesses are carried on together, they are under 
distinct deeds of settlement, with separate shareholders and 
accounts ; although, with some of the earlier Companies, it is not 



268 JOINT WORKING OF LIFE AND FIEE BUSINESSES. 

so. The advantage of having the Fire and Life branches under 
distinct deeds is obvious ; for instance, the one may be discon- 
tinued and disposed of without, in any way, affecting the consti- 
tution of the other. The advantage of having them carried on 
under the same management and on the same premises is also 
obvious : in so far as the expenses of each may be considerably 
reduced, and the connection of the one made greatly serviceable 
in extending the connection of the other. 

About the commencement of the present century some excite- 
ment was got up, in consequence of several of the Fire Offices 
taking up the business of Life Assurance. Now-a-days the fears 
would, with more reason, be in the opposite direction. 



CHAPTER XII. 

RATES OF PREMIUM ; METHOD OF DETERMINING THEM ; AND 
TABLES OF RATES OF ALL THE EXISTING OFFICES. 

The labors of the actuary, as applied to the construction of 
correct Mortality Tables, and the investigations of the financialist, 
with respect to the probable rate of interest to be realized on 
invested capital over a series of years, all concentrate themselves 
in the solution of one problem, viz. the rate of Premium * which 
must be charged in order to carry out an insurance contract ; or as 
Dr. Farr has well expressed it — "What annual premium will 
amount, on an average, at a given rate of interest, and by a 
given Life Table, to £1 or £1,000 at the death of a person of the 
class A. aged 35, or any other age, is a highly important question : 
it stands at the threshold of life assurance." It is clear then that 
if we desire to view the whole structure we must remove all 
obstructions from this point, and such is the purpose of the 
present chapter. 

Sufficient has been said in the previous chapters of this division 
to prepare the reader for understanding the general principles 
and considerations which belong to the construction of rates of 
premium : for instance, the Mortality Tables give the average 
duration and " expectation" of life ; and the average rate of 
interest in past times furnishes at least some guide to what may 
be realised in future : and these are the main elements to be taken 
into account. Still we shall proceed to give here a few simple, 
and we hope useful, preparatory illustrations. 

It is obvious that if a person aged 20 wish to assure for £100, 
(without any addition from profits), and a Mortality Table, 
which could be relied upon, gave him an expectation of 50 more 
years — that is to say, that the Mortality Table showed that, on 
an average, persons aged 20 lived for 50 years longer, and there- 
fore did not die till 70 ; it is obvious that an Assurance Office 
demanding an annual premium of £2 would be perfectly safe : but 
from what has been already been said on the subject of interest it 
is equally obvious that the transaction would be unjust against 
the person assuring, because he would receive no benefit from 
the interest realised on his premiums during the 50 years he 
would be in course of paying them. On this point let us refer the 
reader back to pages 194 and 195 ; merely adding here that (by 
reason of the element of interest) the first £2 paid Avould be worth 
to the Office from four to five times as much as the last two 
pounds, and so proportionally for every £2 paid in the interval. 

* "The* general signification of the Latin word Premium is a reward or recompense, 
but it is also used both by Pliny and Cicero to express an advantage, benefit, or profit, which 
is the sense it bears as the payment made in consideration of an assurance."— Pocock. 



270 " NATURAL " PREMIUMS EXPLAINED. 

The reader will understand that the " expectation" at the age 20 
is not 50 years ; and that this particular term is only introduced 
for purposes of illustration. 

Those who have made themselves familar with the construction 
of Mortality Tables do not require to be told that if the rates of 
premium were charged in strict conformity with the risks or 
chances of life at its various ages (as shown by such Tables) they 
would fluctuate at every year of age : as for instance, the 
premium which represents the risk of assuring £100 for one year 
on the life of a child immediately after birth is (according to 
English Life Table No. 2) £15 9s. Id., without "loading" or 
" addition for expenses and contingencies ;"* while for a like 
assurance at the age of 13, under like circumstances, it is only 
9s. 2d. (nine shillings and twopence); at age 82, however, it again 
stands at £15 10s. 9d. ; and at 90 it is £25 16s. 2d.! This may be 
called the natural premium : the premium, however, which is in 
general use amongst the Offices is known technically as the 
" uniform" or " invariable" premium — names derived from the 
circumstance that the same rate of premium which is paid on 
taking out a policy continues during the remainder of life, or in 
office phraseology during " the currency of the policy." We are 
now speaking of non-participating policies which are exempt 
from bonus influences, and are therefore best adapted for illus- 
tration. If a man aged 30 pays £2 per annum (under the 
uniform rates) to assure £100 at death (without profits) £2 will 
be the annual premium for the remainder of his life. 

The " natural" premium, then, is that which is deduced directly 
from the Mortality Table, without being subjected to the pro- 
cesses of uniformity or invariability. Thus the Table shows that 
out of 307 males aged 30, three will die in the course of the year ; 
therefore, if each of the 307 persons paid down, at the commence- 
ment of a year, 18s. lid., (making £290 8s. 3d., which improved 
at 3 per cent, interest during the year would amount to £300), as 
the premium for assuring £100 to those who died, the claims would 
just equal the funds in hand, and there would be an end of the 
transaction. Or out of 189 males aged 60, six will die during 
the year, so that the payment of £3 2s. 4d. by each at the com- 
mencement of a year would provide for all the claims that would 
arise, viz. £600. 

If Insurance Societies could be conducted on this plan every 
one might readily understand them : but the objections consider- 
ably outweigh all the advantages. In the first place the pre- 
mium would increase with the age from 15 upwards (from birth 
to the age of 13 it decreases year by year) so that a person who 
commenced assuring for £100 at 20, would pay for the first year 
15s. 9d., the second year 16s. By the age of 25 he would pay 
17s. 2d. ; at 30, 17s. lid. ; at 40, £1 3s. 9d. ; at 50, £1 14s. lOd. ; 
at 60, £3 2s. 4d. ; at 70, £6 9s. ; at 80, £13 10s. 3d. ; and at 90, if 

* These terms will be explained as we proceed. 



NATURAL PREMIUMS OBJECTIONABLE IN PRACTICE. 271 

he lived so long, £25 16s. 2d., each intermediate year an increase 
going on, as wfll be seen by the Table presently. 

Now it might be found very convenient in the younger ages to 
be assured so cheaply, but exceedingly inconvenient in the older 
ages to pay so much : for most men, as a matter of policy, would 
rather pay more at the youger ages so as to lighten their 
liabilities in after life. But another difficulty exists ; the Office 
must make sure that it has a class of lives at least up to the 
average as regards health ; otherwise its mortality would be 
greater than that indicated in the Table and provided for by the 
premiums : hence a medical examination would be required of 
each member every year before the Insurance was renewed, and 
this would be not only objectionable on the ground of expense, 
but also from the circumstance that if a person had paid for a 
number of years, and then fell into bad health, he would be 
deprived of the benefit of the assurance just at the period it 
became most desirable to him. This is a fatal objection: and 
variable rates are only used in occasional business arrangements. 

If the plan just detailed w T as found practicable for general 
purposes it would greatly simplify the f nance of Life Assurance; 
for instance, there would be no necessity for periodical valuations 
of assets and liabilities ; each year would prove itself, and be 
distinct in its pecuniary relations from all previous and subsequent 
ones. The policies would have no " surrender" values, as the pre- 
mium would be just equal to the risk. The funds also being 
invested for short periods and at a low rate of interest, might 
be rendered secure from loss, or from any great depreciation, 
although in well-managed Life Offices the losses are exceedingly 
few, while the expenses of management (except in the item of 
medical examinations) would be merely nominal. But as it is 
found not to be practicable we may pass on to another stage. 

Next to simplicity to the natural or variable premiums would 
be the plan of paying the premium for the whole of life in one 
sum, as set forth in the sixth column of the following Table. The 
amount of the " single premium" varies at each age according to 
the decrements of life shown by the Mortality Table, although 
the variation is not so marked as in the case of assurances for one 
year only, because in the one case the average is spread over the 
whole of life ; in the other it is confined to the chances of a single 
year. The principle upon which the " single premiums" are 
calculated is that the sum charged improved at the rate of 
interest assumed in the Mortality Table during the period of the 
expectation of life, will amount to £100.* Column four therefore 
furnishes the key. At the age of 20 the expectation of life is 40 

* All premiums are actually deduced from the decrements shown hy the Life Table : that 
is to say, from the deaths that will take place each year out of any given number of persons 
(vide column 3 of the following Table), and not from the ''expectation" of life shown by 
the Table : the former plan being more mathematically exact. The "expectation" also is 
deduced in like manner from the decrements, as we have shown in a chapter on Mortality 
Tables. In some of the following examples, however, we shall find the expectation better 
adapted for illustration than the decrements. 



272 UNIFORM OB INVARIABLE PBEMIUMS. 

years — £35 4s. lOd. invested at 3 per cent, for forty years will 
amount to £100. At 60 the expectation is 14 years : £67 15s. 
lid. invested at 3 percent, for that term will also produce £100. 
At age 90 the example is exceedingly simple, the expectation is 3 
years: £90 16s. 7d. at 3 per cent, again gives £100. Some addi- 
tions have to be made for expenses ; but it is clearly immaterial 
to the Office at what age the assurance contract is commenced. 
In most cases, however, it would be even more inconvenient to 
pay single premiums than the premiums for a single year. 

The uniform or invariable premium is constructed on the prin- 
ciple of equalisation. A man aged 20 agrees to pay £1 lis. 8d. 
per annum for an assurance of £100, instead of 15s. 9d., the na- 
tural premium for that age (increasing with each additional year 
of age) in order that when he arrives at 60 he may still have only 
£1 lis. 8d. to pay instead of £3 2s. 4d., which is the " natural" 
premium for age 60 ; or instead of £6 9s., which is the " natural " 
premium at age 70, should he live so long. That which he pays 
over and above the natural premium in his early years is invested 
at interest to compensate for that which he pays below the natural 
premium in the after ages : the reverse occurring at the age of 48. 
If a person assuring at age 20 die before the age of 48, the Office 
gains an advantage by the uniform rates ; if he die after that age 
the natural rates would pay the Office best. Looking at it in 
another light, the " expectation " at age 20 is 40 years — forty 
times £1 lis. 8d. is £63 6s. 8d. ; the " natural " premiums on a £100 
policy during the like period would amount to £55 5s., or £8 Is. 
8d. less ; but for this £8 Is. 8d. (and interest thereon made during 
the term) the policy-holder is exempt from the difference between 
the " uniform " and the " natural " premium at all ages above 60, 
where the difference is very great ; and also exempt from rejec- 
tion on the ground of unsound health, &c. &c. So that there can 
be no doubt that the uniform rates are more advantageous to po- 
licy-holders as well as far more convenient. Most Offices indeed 
have Tables of " increasing " rates : that is, rates which increase 
from time to time after the assurance is effected, according to a 
graduated scale — the increase generally taking place each five or 
seven years up to a given age, when the premiums become sta- 
tionary. There are also Tables the exact reverse of these, or 
" decreasing " rates, graduated in periods of five years. Such 
Tables, however, are arranged for special cases, and have already 
been explained. 

The difference between the single premium, and the aggregate 
of the annual premiums, expected to be paid at any age is entirely 
occasioned by the operation of interest. At age 20 the single 
payment is £48 10s. 9d. ; the annual payment of £1 lis. 8d. for 
40 years (column 4) we have just seen is £63 6s. 8d. — difference 
£14 15s. lid. As we have said, it is immaterial to an Office at 
what age an assurance is commenced, providing it be within limits 
likely to afford a fair average of lives, because each person is called 



REASONS FOR ASSURING YOUNG. NET RATES. 273 

upon to pay an increased premium corresponding with his age, 
or his chances of dying sooner. So that if a person at an advanced 
age make a larger annual payment than a young man, he may be 
expected to make fewer of them. 

We would not be understood to assert that it is equally imma- 
terial to the assured at what period of life they commence the 
assurance contract. We most decidedly recommend all persons 
to assure young. If they cannot assure for such a sum as they 
may desire, let them assure for such a sum as they can afford. 
Leaving out the advantage of assuring while they are in robust 
health, which is an important one, the outlay is much less at the 
commencement of the contract, and continues so during the whole 
of life, as already explained. But the chief inducement lies in the 
increased Bonus advantages. If a man assures for a small sum, 
and allows his bonuses to accumulate, the sum steadily increases, 
and in a series of years will probably become doubled. If he 
applies his bonuses to reduction of premiums, in his later years he 
will be exempt from payment altogether. In every respect the 
inducement appears great. How many times does an agent in his 
experience receive the reply, " Ah ! I wish I had assured when I 
was young." On how many death-beds has this wish been breathed 
with mournful intensity ! Let us then not be misunderstood on 
this point. 

We have, in our previous examples in this chapter, confined 
ourselves to non-participating assurances ; or those which give the 
policy-holders no share in the profits of the Office ; and the rates 
we have quoted have been what are called " net " or " pure " 
rates : that is to say, rates which have had no additions made to 
them for the purposes of meeting expenses of management, or 
losses or contingencies of any kind, other than the contingency of 
death. We need not say that such rates are not, and could not, 
be used in practice : they have to undergo the process of " charg- 
ing " or " loading," by which they become increased some 20 per 
cent, or more, as we shall presently see. The pure or natural 
rates are, as already stated, those derived directly from the Mor- 
tality Table : the process being a mathematical one which it is 
out of our province here to explain. But it will greatly facilitate 
the understanding of the subject, if we now present the entire 
Table from which the several foregoing examples have been 
drawn, under such an arrangement as to show the connection of 
the rates icith the risks of life ; and the first five columns exhibit 
this point very clearly. As we have not done so before, we may 
take this opportunity of impressing upon the reader the necessity 
of reading very carefully the explanation over each column of 
this and all previous and subsequent Tables. A neglect of this 
rule often causes Tables to be looked upon as useless, or tedious, 
when they are replete with instruction and utility. 



274 



TABLES. 



Summary of results deduced from the English Life Table, No. 2, for Males 
only. Interest 3 per cent, per Annum. 



£ 


-5-° .5 


s 

.£'£ 


*o « 


To Assure .£100 on the Life of a Male. 






£ 


r= E.g 


u> c 


c s 








Present value 


Life Annuity 


.£ 


"" = "»3 


"R<2 


"r ^ 








of a 


which £100 


CO 
O 
M 


If! 


"eS h 




Premium for 
a single 
year. 


Premium for 

the whole of 

Life in one 

sum. 


Uniform 
Annual 
Premium. 


Life Annuity 
ofdEl. 


will 
purchase. 










£ s. d. 


£ s. d. 


£ s. d. 


£ s. d. 


£ s. d. 





513 


82 


40 


15 9 7 


43 17 9 


2 5 7 


19 5 4 


5 3 10 


1 


431 


28 


47 


6 6 10 


34 16 2 


1 11 1 


22 7 8 


4 9 4 


2 


403 


15 


49 


3 10 1 


31 7 4 


16 7 


23 11 3 


4 4 11 


3 


388 


10 


50 


2 7 11 


29 15 6 


14 8 


24 2 3 


4 2 11 


4 


379 


7 


50 


1 15 7 


28 18 3 


13 8 


24 8 2 


4 1 11 


5 


372 


5 


50 


1 6 2 


28 9 5 


13 2 


24 11 2 


4 15 


6 


367 


4 


50 


19 5 


28 7 2 


13 1 


24 11 11 


4 14 


7 


363 


3 


49 


16 9 


28 9 11 


13 3 


24 11 


4 16 


8 


360 


3 


49 


14 1 


28 14 8 


13 6 


24 9 4 


4 19 


9 


357 


2 


48 


12 6 


29 1 8 


1 3 11 


24 7 


4 2 2 


10 


355 


2 


47 


10 6 


29 10 1 


14 5 


24 4 1 


4 2 8 


11 


353 


2 


47 


9 4 


30 2 


15 


24 7 


4 3 3 


12 


351 


2 


46 


9 3 


30 11 6 


15 8 


23 16 9 


4 3 11 


13 


350 


2 


45 


9 2 


31 3 4 


16 4 


23 12 8 


4 4 8 


14 


348 


2 


44 


10 8 


31 15 7 


17 2 


23 8 5 


4 5 5 


15 


346 


2 


44 


9 8 


32 7 3 


1 7 10 


23 4 5 


4 6 1 


16 


344 


2 


43 


11 


33 


18 8 


23 1 


4 6 11 


17 


342 


2 


42 


12 10 


33 12 3 


19 6 


22 15 10 


4 7 9 


18 


340 


3 


41 


14 9 


34 3 9 


1 10 3 


22 11 11 


4 8 6 


19 


338 


3 


41 


15 5 


34 14 4 


1 11 


22 8 3 


4 9 3 


20 


335 


3 


40 


15 9 


35 4 10 


1 11 8 


22 4 8 


4 9 11 


21 


332 


3 


39 


16 


35 15 7 


1 12 5 


22 1 


4 10 8 


22 


329 


3 


39 


16 3 


36 6 7 


1 13 3 


21 17 3 


4 11 6 


23 


327 


3 


38 


16 7 


36 17 9 


1 14 1 


21 13 4 


4 12 4 


24 


324 


3 


37 


16 10 


37 9 3 


1 14 11 


21 9 5 


4 13 2 


25 


321 


3 


37 


17 2 


38 1 


1 15 9 


21 5 5 


4 14 


26 


318 


3 


36 


17 6 


38 12 11 


1 16 8 


21 1 4 


4 15 11 


27 


315 


3 


35 


17 10 


39 5 2 


1 17 8 


20 17 1 


4 14 11 


28 


313 


3 


35 


18 2 


39 17 9 


1 18 8 


20 12 9 


4 16 11 


29 


310 


3 


34 


18 6 


40 10 6 


1 19 8 


20 8 5 


4 17 11 


30 


307 


3 


33 


18 11 


41 3 8 


2 9 


20 3 11 


4 19 


31 


304 


3 


33 


19 4 


41 17 


2 1 11 


19 19 3 


5 2 


32 


301 


3 


32 


19 9 


42 10 8 


2 3 1 


19 14 7 


5 14 


33 


298 


3 


31 


1 3 


43 4 8 


2 4 4 


19 9 10 


5 2 7 


34 


294 


3 


31 


10 9 


43 18 11 


2 5 8 


19 4 11 


5 3 11 


35 


291 


3 


30 


1 1 3 


44 13 6 


2 7 


18 19 11 


5 5 3 


36 


288 


3 


29 


1 1 10 


45 8 4 


2 8 6 


18 14 10 


5 6 9 


37 


285 


3 


28 


12 5 


46 3 6 


2 10 


18 9 7 


5 8 3 


38 


282 


a 


28 


13 1 


46 19 


2 11 7 


18 4 4 


5 9 10 


39 


278 


3 


27 


13 9 


47 14 8 


2 13 2 


17 18 11 


5 11 5 


40 


275 


3 


26 


14 6 


48 10 9 


2 14 11 


17 13 5 


5 13 2 


41 


271 


4 


26 


15 3 


49 7 1 


2 16 9 


17 7 9 


5 15 


42 


268 


4 


25 


16 1 


50 3 9 


2 18 8 


17 2 1 


5 16 11 


43 


264 


4 


24 


17 


51 8 


3 9 


16 16 3 


5 19 


44 


261 


4 


24 


1 7 11 


51 17 11 


3 2 10 


16 10 4 


6 1 1 


45 


257 


4 


23 


1 8 11 


52 15 6 


3 5 1 


16 4 4 


8 3 4 


46 


253 


4 


22 


1 10 


53 13 4 


3 7 6 


15 18 2 


6 5 9 


47 


249 


4 


22 


1 11 1 


54 11 6 


3 10 


15 11 11 


6 8 3 


48 


245 


4 


21 


1 12 3 


55 10 


3 12 8 


15 5 7 


6 10 11 


49 


241 


4 


21 


1 13 6 


56 8 9 


3 15 6 


14 19 1 


6 13 9 



TABLES. 



275 



Summary of results {continued) 



tj 


C t, . 


.5 '%■ 


"3 a 


To Assure XI 00 on the Life of a Male. 






-3 


.-3 £ '> 


°°2 
•- [3 


.1 « 








Present Talue 
of .1 


Life Annuity 
which .£100 








s 

O 
< 


hi 

So* 






Premium for 
a single 
year. 


Premium for 

the whole of 

Life in one 

sum. 


Uniform 
Annual 
Premium. 


Life Annuity 
of XI. 


will 
purchase. 










£ s. d. 


£ s. d. 


£ s. d. 


£ s. d. 


£ s. d. 


50 


237 


4 


20 


1 14 10 


57 7 11 


3 18 6 


14 12 7 


6 16 9 


51 


233 


4 


19 


1 16 3 


58 7 5 


4 18 


14 5 10 


6 19 11 


52 


228 


4 


19 


1 17 8 


59 7 3 


4 5 1 


13 19 


7 3 4 


58 


224 


5 


18 


1 19 3 


60 7 6 


4 8 9 


13 12 1 


7 7 


54 


219 


5 


17 


2 10 


61 8 2 


4 12 8 


13 5 


7 10 11 


55 


215 


5 


17 


2 2 6 


62 9 2 


4 16 11 


12 17 9 


7 15 2 


56 


210 


5 


16 


2 4 10 


63 10 9 


5 16 


12 10 5 


7 19 9 


57 


205 


5 


15 


2 9 2 


64 12 6 


5 6 5 


12 2 11 


8 4 8 


58 


200 


6 


15 


2 13 5 


65 13 11 


5 11 7 


11 15 7 


8 9 10 


59 


194 


6 


14 


2 17 10 


66 15 


5 16 11 


11 8 4 


8 15 2 


60 


189 


6 


14 


3 2 4 


67 15 11 


6 2 7 


11 1 2 


9 11 


61 


183 


6 


13 


3 7 1 


68 16 6 


6 8 7 


10 14 1 


9 6 10 


62 


176 


7 


12 


3 12 2 


69 17 


6 14 11 


10 7 


9 13 2 


63 


170 


7 


12 


3 17 6 


70 17 3 


7 18 


10 1 


9 19 11 


64 


163 


7 


11 


4 3 3 


71 17 4 


7 8 10 


9 13 2 


10 7 1 


65 


156 


7 


11 


4 9 5 


72 17 2 


7 16 4 


9 6 4 


10 14 8 


66 


149 


7 


10 


4 16 1 


73 16 10 


8 4 5 


8 19 8 


11 2 8 


67 


141 


8 


10 


5 3 4 


74 16 2 


8 13 


8 13 


11 11 3 


68 


134 


8 


9 


5 11 3 


75 15 3 


9 2 1 


8 6 5 


12 4 


69 


126 


8 


9 


5 19 9 


76 14 


9 11 9 


8 


12 10 


70 


118 


8 


9 


6 9 


77 12 5 


10 2 


7 13 8 


13 3 


71 


111 


8 


8 


6 19 


78 10 5 


10 13 


7 7 6 


13 11 3 


72 


103 


8 


8 


7 9 10 


79 S 1 


11 4 7 


7 15 


14 2 10 


73 


95 


8 


7 


8 16 


80 5 3 


11 16 10 


6 15 6 


14 15 1 


74 


87 


8 


7 


8 14 1 


81 1 11 


12 9 11 


6 9 10 


15 8 2 


75 


79 


8 


7 


9 7 7 


81 18 2 


13 3 9 


6 4 3 


16 2 


76 


71 


7 


6 


10 2 1 


82 13 10 


13 18 4 


5 18 10 


16 16 7 


77 


64 


7 


6 


10 17 7 


83 9 


14 13 9 


5 13 8 


17 12 


78 


57 


7 


6 


11 14 1 


84 3 8 


15 10 


5 8 7 


18 8 3 


79 


50 


6 


5 


12 11 7 


84 17 8 


16 7 2 


5 3 9 


19 5 5 


80 


44 


6 


5 


13 10 3 


85 11 3 


17 5 2 


4 19 2 


20 3 5 


81 


37 


6 


5 


14 9 11 


86 4 2 


18 4 2 


4 14 8 


21 2 5 


82 


32 


5 


4 


15 10 9 


86 16 7 


19 4 


4 10 5 


22 2 3 


83 


27 


5 


4 


16 12 7 


87 8 5 


20 4 10 


4 6 5 


23 3 1 


84 


22 


4 


4 


17 15 8 


87 19 8 


21 6 7 


4 2 6 


24 4 10 


85 


18 


4 


4 


18 19 9 


88 10 5 


22 9 3 


3 18 10 


25 7 6 


86 


15 


3 


4 


20 4 11 


89 8 


23 12 11 


3 15 4 


26 11 2 


87 


12 


3 


3 


21 11 2 


89 10 5 


24 17 6 


3 12 


27 15 9 


88 


9 


2 


3 


22 18 6 


89 19 7 


26 3 


3 8 10 


29 1 4 


89 


7 


2 


3 


24 6 10 


90 8 4 


27 9 6 


3 5 10 


30 7 9 


90 


5 

4 


1 

1 


3 
3 


25 16 2 


90 16 7 


28 16 10 


3 3 


31 15 1 


91 












92 
93 


3 
2 

1 
1 
1 


1 
1 





3 
2 
2 
2 
2 


[As Assi 


ired and Anr 


uity transa 


ctions are" v( 


;ry rarely 


negociatec 
a very cu 


at such ad^ 


anced ages 


even as 90- 


-60 being 


94 
95 
96 


stomary limit 


— it was co 


nsidered usel 


ess to ex- 


tend the 1 


ist four colum 


ns any furt 


her.] 




97 








2 












i 


9. 


3 


4 


5 


6 


7 


8 


9 



Dr. Farr, to whose able and laborious investigations we owe 
this Table, gives the following explanation concerning it :— 



276 EXPLANATION OF THE PRECEDING TABLE. 

" By tliis Table it is seen that if 332 men (column 2), at the age of 21 (col- 
umn 1), paid £1 12s. 5d. (column 6) each at that birthday, and the same sum 
at every future birthday so long as they lived — the money realizing 3 per 
cent, per annum interest — it would amount to £100 at the death of each, or, 
as is understood in these cases, at the end of the year in which the death oc- 
curred. If the cost of management were nothing in a Mutual Life Office £1 
12s. 5d. would be the annual premium to be paid for a policy of £100. The 
payment of 16s. (column 5) would, on the same terms, be the premium for 
insuring the life of a male for one year only for £100. If anyone who wished 
to insure the life of a boy engaged to pay to an Office the premiums in col- 
umn 5, commencing with £15 9s. 7d. at birth, £6 6s. lOd. on the first birth- 
day, 9s. 8d. on the 15th, and £6 9s. on the 70th birthday ; or, in fact, the pre- 
miums in column 5, opposite to each birthday, so long as the life should last, 
the risk would be covered from year to year, and the transaction might ter- 
minate at the end of any year without loss to either 'party. These are the net 
premiums ; and for females the premiums would be a little less, although but 
few offices make any distinction between their male and female rates. If the 
Office put on — as is usual with all Companies — 20 or 30 per cent, for expenses 
and profit, the usual profits would be realized ; but the addition on this plan 
(of varying premiums) should be rather greater than in case of uniform pre- 
miums, as subscribed capital would be required to cover fluctuations in the 
mortality." 

The two last columns in the Table apply to annuities, which 
are also seen to be regulated entirely by the risks and chances of 
life at the various ages. Here are Dr. Farr's observations on the 
Table :— 

" The present value of a Life Annuity of £1 at the age of 21 is £22 Is. (col- 
umn 8) on the life of a male. On the life of a female it would be rather 
more, as female life is longer than male life. The present value of an an- 
nuity of £1,000 a-year on the life of a man would be 1,000 times £22 Is., or 
£22,050 ; and in the same way the value of an annuity of £10, £20, £35, or 
any other number of pounds may be found. £100 will purchase an annuity 
of £4 10s. 8d. (column 9) on the life of a man aged 21, and about a shilling 
less on the life of a female. £1,000 will of course purchase an annuity of 10 
times the amount, or £45 6s. 8d. on the life of a man. But the office grant- 
ing annuities at these rates would gain nothing (except by making more than 
3 per cent, interest of the purchase money), the values in the Table being the 
net values ; they might, indeed, lose, if the lives were well selected — that is, 
if the lives were above the ordinary standard of health. For these reasons a 
certain arbitrary percentage must be put on the present values and taken 
off the annuities. And an Office attempting to sell annuities on these terms 
might be looked upon with suspicion." 

It may not be out of place here to remark, that an annuity 
transaction in the ordinary form is the very reverse of a Life 
Assurance transaction. In the latter case, as the reader already 
knows, the Office stipulates, in consideration of a certain annual 
premium (or in other words "an annuity") being paid during the 
life of the person assured to pay down a certain principal sum on 
the termination of that life. In the case of an annuity the Office 
guarantees, in consideration of a certain principal sum paid down 
at the commencement of the transaction, to grant a certain annual 
allowance or annuity, during the life of the person paying such 
principal sum. In the Life Assurance transaction it is clearly to 
the interest of the Office that the policy-holder should continue 
to live : the advantage being the receipt of the annual premium, 
and the interest which the Office realizes on the principal sum to 
be paid on the death of the policy-holder. In the case of an 



OF PKEMIUMS. 277 

annuity, it is clearly to the advantage of the Office that the an- 
nuitant should not live : for by his early death the Office retains 
the annual payments it would otherwise have to make, and is 
benefited to that extent. It is obvious, therefore, that while an 
Office must exercise great caution in the selection of lives for 
assurance purposes, with the view that they should survive the 
full average of life, in the case of an annuity transaction no such 
selection is desirable for the Office, but rather the reverse. The 
public, however, generally understand this side of the case, as is 
shown by the fact that in nearly all Annuity Societies the dura- 
tion of life is greater, on an average, than in Life Offices ! 

It will occur to many of our readers, while reflecting on the 
above points, that if a person, at the time of assuring his life for 
£100, or any other sum (in a Mutual Society), should pay into the 
funds of the same Society a principal sum, of the same amount 
as that assured by his life policy, for the purchase of an annuity, 
it would be a matter of comparatively small pecuniary moment 
to the Office whether he died the next day or lived till he reached 
a hundred years ! This is of course assuming that the Office 
used the same mortality Table in each case. The reason being 
that the annual premiums paid for the assurance, with the inter- 
est realized on the principal sum to be paid under the life policy 
at death, are at all ages of life about equal to the annuity to be 
paid by the Office. The Table just given will furnish illustra- 
tions. Add to the annual premiums named in column 7, at any 
age, £3, the interest supposed to be realized on £100 to be paid 
at the death of the assured, and the two amounts will equal 
that given in column 9, as the annuity to be paid at the same age 
in respect of every £100 deposited with the Society. Thus, at 
age 20, the uniform annual premium is £1 lis. 8d ; £3 added, 
making £4 lis. 8d. — annuity in column 9, £4 9s. lid., the slight 
difference being occasioned by interest. 

The above examples apply to ordinary life and annuity trans- 
actions. All kinds of modifications have been introduced. 

Returning to the charge — literally to the '* charge," as regards 
life premiums — it will naturally occur, even to the most inexpe- 
rienced reader, that it would be exceedingly unwise of any Office, 
even a Mutual one — indeed, the Mutual Offices generally charge 
the highest premiums — to commence operations upon " net" rates 
of premiums. In the first place there would be no fund for the 
expenses of management; and, in the next, the slightest increase 
in the mortality experienced over that expected, or the slightest 
reduction in the rate of interest realized below that anticipated, 
would spread dismay, and probably ruin, over the whole concern ; 
therefore, some loading to the pure premiums may be considered 
as absolutely necessary, although what that may, or should be, is 
a point which, up to the present time, remains undecided. No 
rule has ever been adhered to, however many may have been laid 
down: hence the rates of premium of the Offices based upon the 
same mortality Table vary almost as much as those of Offices 
based upon different Tables. It is, therefore, impossible to deter- 



278 EFFECT OF THE 

mine under what mortality Table an Office is conducting its ope- 
rations simply by its rates of premium. The rates of the Carlisle 
Table, with an addition of 30 per cent., would, at many ages, 
hardly equal the rates of the Northampton Table, with an addi- 
tion of only 5 per cent. ! And many of the Offices vary the rate 
of loading at different ages : thus, at the younger ages, 10 per 
cent, only may be added to the pure premiums; at the middle 
ages, 20 per cent. ; and at the advanced ages, 30 per cent. By 
this means, indeed, even the inequalities and a defective life Table 
may be, in a great measure, remedied ; and the Northampton 
Table, especially, requires some such treatment. 

Many of the older English Offices have adopted the rates 
derived from the 3 per cent. Northampton Table without loading 
at all. Some of the early Scotch Offices (more especially the 
Mutual ones) have taken their rates from the Northampton 4 per 
cent. Table, with but a very small addition in the shape of loading. 
The Mixed Offices in Scotland mostly use the Carlisle 3 per cent, 
or 3|- per cent. Tables with a moderate loading. Many of the 
English Offices established since 1816 do the same. Others take 
the " Experience" Tables at 3 or 3| per cent, and a loading. A 
few have adopted the " Government" 3 per cent. Tables ; and. 
several of the most recent ones the English Life Table, with a 
loading of course. Of others, if we may judge from appearances, 
we should say they stand in the position of the possessors of 
stolen goods, and can give no very " satisfactory account" of 
how they came by them : for this the penalty, in the shape of 
inconveniences and the liability to error in all actuarial investiga- 
tions, is a heavy one. 

We have heard of an Office, the rates for which were obtained 
by taking the rates of some ten or twelve other Offices, repre- 
senting as many Mortality Tables, or distinct processes of load- 
ing, casting them together, and then taking the " mean" of the 
whole — and an exceedingly mean process it is. Others have 
evidently been more sparing of pains, and by taking a penny off 
one age and putting it on at another, have produced a " penny 
wise and pound foolish" result, of the evils of which they could 
have no adequate conception. 

The importance of having properly constituted rates of premium 
is not simply confined to the question of the solvency of an Office 
or otherwise, but is attended with many practical advantages, 
as we shall see when we come to remark upon bonuses. It will 
be sufficient for us here to remark that in valuing the assets and 
liabilities of an Assurance Office it is necessary to distinguish the 
"pure" from the "gross" premium — that is to say, to indicate 
exactly what proportion of the premium was intended to meet 
the risk of death, and what was simply added to provide expenses 
of management, and meet any contingencies which may arise. 
The following Table is arranged to show the effect of a 20 per 
cent, loading on the pure rates of the English Life Table, already 
given, and to contrast them with those of the Carlisle and North- 
ampton Tables, the latter without any loading at all. 



TABLE. 



2?9 



TABLE 

Showing the process of "loading" rates of premium: also affording a comparison between 

the English and Carlisle Rates loaded, and the Northampton net Rates. 



Age. 


English Table, 3 per cent. 


English rates 
charged. 


Carlisle 4 p. ct. 

rates charged 

40 per cent. 


Northampton 

3 per cent., 

not charged. 


Net premium. 


Charge 20 p. ct. 




£ s. d. 


£ s. d. 


£ a. d. 


£ s. d. 


£ s. d. 


15 


1 7 10 


5 7 


1 13 5 


1 12 8 


1 18 7 


16 


18 8 


5 9 


1 14 5 


1 13 6 


1 19 7 


17 


19 6 


5 11 


1 15 5 


1 14 3 


2 8 


18 


1 10 3 


6 1 


1 16 4 


1 15 1 


2 18 


19 


1 11 


6 2 


1 17 2 


1 16 


2 2 8 


20 


1 11 8 


6 4 


1 18 


1 16 11 


2 3 7 


21 


1 12 5 


6 6 


1 18 11 


1 17 11 


2 4 6 


22 


1 13 3 


6 8 


1 19 11 


1 18 11 


2 5 4 


23 


1 14 1 


6 10 


2 11 


2 1 


2 6 2 


24 


1 14 11 


7 


2 1 11 


2 13 


2 7 1 


25 


1 15 9 


7 2 


2 2 11 


2 2 6 


2 8 1 


26 


1 16 8 


7 4 


2 4 


2 3 9 


2 9 1 


27 


1 17 8 


7 7 


2 5 3 


2 5 2 


2 10 1 


28 


1 18 8 


7 9 


2 6 5 


2 6 7 


2 11 1 


29 


1 19 8 


7 11 


2 7 7 


2 7 11 


2 12 2 


30 


2 9 


8 2 


2 8 11 


2 9 2 


2 13 4 


31 


2 1 11 


8 5 


2 10 4 


2 10 6 


2 14 7 


32 


2 3 1 


8 8 


2 11 9 


2 11 10 


2 15 9 


33 


2 4 4 


8 11 


2 13 3 


2 13 4 


2 17 1 


34 


2 5 8 


9 2 


2 14 10 


2 14 11 


2 18 5 


35 


2 7 


9 5 


2 16 5 


2 16 8 


2 19 10 


36 


2 8 6 


9 8 


2 18 2 


2 18 5 


3 14 


37 


2 10 


10 


3 


3 4 


3 2 10 


38 


2 11 7 


10 4 


3 1 11 


3 2 4 


3 4 6 


39 


2 13 2 


10 8 


3 3 10 


3 4 5 


3 6 2 


40 


2 14 11 


11 


3 5 11 


3 6 6 


3 8 


41 


2 16 9 


11 4 


3 8 1 


3 8 7 


3 9 10 


42 


2 18 8 


11 9 


3 10 5 


3 10 9 


3 11 8 


43 


3 9 


12 2 


3 12 11 


3 12 11 


3 13 8 


44 


3 2 10 


12 7 


3 15 5 


3 15 3 


3 15 9 


45 


3 5 1 


13 


3 18 1 


3 17 8 


3 17 11 


46 


3 7 6 


13 6 


4 10 


4 5 


4 2 


47 


3 10 


14 


4 4 


4 3 3 


4 2 7 


48 


3 12 8 


14 6 


4 7 2 


4 6 6 


4 5 1 


49 


3 15 6 


15 1 


4 10 7 


4 10 2 


4 7 10 


50 


3 18 6 


15 8 


4 14 2 


4 14 2 


4 10 7 


51 


4 18 


16 4 


4 18 


4 18 9 


4 13 6 


52 


4 5 1 


17 


5 2 1 


5 3 6 


4 16 5 


53 


4 8 9 


17 9 


5 6 6 


5 8 7 


4 19 7 


54 


4 12 8 


18 7 


5 11 3 


5 14 1 


5 2 10 


55 


4 16 11 


19 5 


5 16 4 


5 19 11 


5 6 4 


56 


5 16 


10 4 


6 1 10 


6 6 4 


5 10 1 


57 


5 6 5 


113 


6 7 8 


6 13 2 


5 14 


58 


5 11 7 


1 2 4 


6 13 11 


7 5 


5 18 2 


59 


5 16 7 


13 5 


7 4 


7 7 9 


6 2 7 


60 


6 2 7 


14 6 


7 7 1 


7 14 11 


6 7 4 


61 


6 8 7 


15 9 


7 14 4 


8 17 


6 12 4 


62 


6 14 11 


17 


8 1 11 


8 8 6 


6 17 9 


63 


7 18 


1 8 4 


8 10 


8 15 11 


7 3 7 


64 


7 8 10 


19 9 


8 18 7 


9 4 2 


7 9 10 



280 



TABLE. 









Process of " 


Loading" (contv 


wed.) 




Age. 


English Table, 3 per cent. 


English rates 
charged. 


Carlisle 4 p. ct. 
rates charged 
40 per cent. 


Northampton 
3 per cent, 
not charged. 


Net premium. 


Charge 20 p. ct. 




£ s. 


d. 


£ s. d. 


£ s. d. 


£ s. d. 


£ s. d. 


65 


7 16 


4 


1 11 3 


9 7 7 


9 13 2 


7 16 8 


66 


8 4 


5 


1 12 11 


9 17 4 


10 3 1 


8 4 1 


67 


8 13 





1 14 7 


10 7 7 


10 14 2 


8 12 1 


68 


9 2 


1 


1 16 5 


10 18 6 


11 6 5 


9 9 


69 


9 11 


9 


1 18 4 


11 10 1 


12 2 


9 10 2 


70 


10 2 





2 5 


12 2 5 


12 15 6 


10 4 


71 


10 13 





2 2 7 


12 15 7 


13 12 10 


10 11 4 


72 


• 11 4 


7 


2 4 11 


13 9 6 


14 10 11 


11 3 4 


73 


11 16 


10 


2 7 5 


14 4 3 


15 8 8 


11 16 2 


74 


12 9 


11 


2 10 


14 19 11 


16 5 11 


12 9 10 


75 


13 3 


9 


2 12 9 


15 16 6 


17 1 1 


13 4 4 


76 


13 18 


4 


2 15 8 


16 14 


17 17 1 


13 19 3 


77 


14 13 


9 


2 18 9 


17 12 6 


18 13 


14 15 8 


78 


15 10 





3 2 


18 12 


19 10 4 


15 14 


79 


16 7 


2 


3 5 5 


19 12 7 


20 11 6 


16 15 8 


80 


17 5 


2 


3 9 1 


20 14 3 


21 12 6 


18 


81 


18 4 


2 


3 12 10 


21 17 


22 17 8 


19 6 3 


82 


19 4 





3 16 10 


23 10 


24 2 3 


20 14 8 


83 


20 4 10 


4 10 


24 5 10 


25 9 10 


22 4 


84 


21 6 


7 


4 5 4 


25 11 11 


26 19 1 


23 8 11 



This Table will be found exceedingly useful in testing the equity, 
or otherwise, of the rates of premium adopted by the various Of- 
fices, assuming, as we have already done, that the English Life 
Table fairly represents the present mortality of the kingdom, and 
of this we can see no room to doubt. It will be observed, that at 
all ages up to 44 the Northampton rates are the highest. That 
at that age the rates under each of the Tables almost exactly cor- 
respond ; and that in the after ages, the Northampton rates are 
lower than those of either of the other Tables. This was to be 
expected for the reasons pointed out in our chapter on Mortality 
Tables." 

Dr. Farr has pointed out that in the preceding Table the North- 
ampton rate, at age 20, is 38 per cent, in excess of the "net" pre- 
mium in the English Life Table; while at 50, it is only 15 per 
cent, in excess, and at 66 it give the net premium without any 
" charge" at all. The average at all ages is 27 per cent, in excess 
of the net premium of the English Table ; and he adds, " Hence 
all the transactions of insurance by the Northampton Table are 
loaded with a certain degree of injustice, increasing in its amount 
and pressure as you descend to the earlier ages at which assuran- 
ces are effected." 

The "net" premiums for assuring £100 for one year are as fol- 
lows, under the three following Mortality Tables. We add them 
for the purposes of comparison : — 



COMPARISON OF PREMIUMS. 



281 





Age 10. 


Age 20. 


Age 30. 


Age 40. 


Age 50. 


Age 60. 


Age 70. 


Northampton Table... 


8. d. 

17 9 
8 9 
13 2 


£ 8. d. 

17 3 
13 9 
14 2 


£ 8. d. 

1 13 3 

19 7 
16 4 


£ 8. d. 

2 7 
15 3 
10 1 


£ 8. d. 

2 15 1 
16 1 
1 10 11 


£ 8. d. 

3 18 2 
3 5 
2 18 11 


£ s. d. 
6 6 1 

5 3 

6 6 1 


Experience Table 



The annual invariable premiums for the Assurance of £100 un- 
der the same Tables, are — 





Age 10. 


Age 20. 


Age 30. 


Age 40. 


Age 50. 


Age 60. 


Age TO. 


Northampton Table . . . 
Carlisle Table 


£ s. d. 
1 14 1 

13 4 
1 3 10 


£ s. d. 

2 3 7 
1 9 11 
19 6 


£ s. d. 
2 13 4 

1 19 

1 18 1 


£ 8. d. 

3 8 
2 12 
2 12 1 


£ 8. d. 

4 10 7 
3 12 5 
3 16 8 


£ s. d. 

6 7 4 

5 15 10 

6 6 


£ s. d. 

10 4 
9 8 
10 2 


Experience Table 



In each case 3 per cent, interest is assumed. 

The Carlisle Table, up to age 27, gives a rate of premium very 
slightly below that of the English Table, and at all the advanced 
ages rates a little above it. The Table just given shows that if 
interest be taken at 4 per cent., and a charge of 40 per cent, be 
added to the Carlisle Table, its premiums will differ little from 
those of the English 3 per cent. Table for males, with an addition 
of 20 per cent. We will not, however, pursue this point further 
at present. The following Tabular comparisons may be found 
useful : — 

The Northampton 3 per cent, premium is equal to the 
Carlisle 3 per cent, increased about 28 per cent. 



And equal to the Carlisle 4 per cent. 
Experience 3 per cent. 
Experience 4 per cent. 
English 3 per cent. 
English 4 per cent. 

As various allusions are made to 



39 per cent. 
25 per cent. 

36 per cent. 
27 per cent. 

37 per cent. 



3 per cent.," " S x 



2' 



and " 4 
per cent. Tables," it may be useful here to explain — although we 
believe we have previously referred to the fact — that these per 
centages relate to the rates of interest at which it is assumed the 
funds of the Office will be improved. In all monetary trans- 
actions which bear relation to remote periods, interest, as we have 
seen, enters largely into the consideration. Assurance calcula- 
tions being of this class, the question of interest meets us at every 
point, and must be thoroughly understood before the principles 
upon which Life Offices are conducted can be comprehended. 
An annual payment or annuity of £1, invested at 3 per cent. 
for 50 years, amounts to £112 ; while at 5 per cent, during a like 



282 



EFFECT OF INTEEEST ON PREMIUMS. 



period it reaches £209, giving a difference on this small sum of 
nearly £100. Suppose the case then of a policy-holder paying to 
a Life Office £50 per annum for an assurance on his life, and liv- 
ing 50 years after the date at which the assurance commenced, it 
would make a difference of very nearly £5,000 to the Office, 
whether these premiums were invested at 5 instead of 3 per cent. ! 
being a sum probably two-fold greater than that assured under 
the original policy. It is clearly then of the very highest impor- 
tance to the Office that it does not calculate upon a higher rate of 
interest than it may thereafter realise, and to the assured that it 
does not assume a much lower rate than will probably be made, 
unless he is certain of a proportionate benefit in some other form, 
as by way of bonus addition, &c. 

Mr. Hillman furnishes an example of the operation of interest 
on a larger scale than those already given : — 

" Suppose," lie says, " three Institutions for the Assurance of Life invested 
the sum of £500,000 with its accumulating interest at 5, 4, and 3 per cent, re- 
spectively, and that the interests were receivable half-yearly — at the end of 20 
years the following would be the amounts of the original principals with their 
respective accumulations : — 

£1,342,532. 



1st Office £500,000 at 5 per cent. 



2nd 
3rd 



£1,104,020. 
£907,010. 



The difference between the amount of the Office investing at 5 per cent, and 
the other that obtained only 3 per cent, is £435,522, which invested at 5 per 
cent, would produce an annual revenue of £21,776, an income more than suffi- 
cient to pay the expenses of management of half-a-dozen Assurance Compa- 
nies." 

Net Annual Premiums required to assure £100, payable at Death, at 3 and 4 per cent, in- 
terest, as deduced from the following Tables of Mortality, exclusive of any loading for 
expenses or contingencies. 



Age. 


Northampton 
Table. 


Carlisle Table. 


Combined 

Experience 

of 17 London 

Offices. 


Government Tables. 
(Finlaison.) 


English Life 
Table. 


Age. 


3 per 1 4 per 
cent. 1 cent. 


3 per 1 4 per 
cent. 1 cent. 


4 per cent. 


4 per cent. 


4 per cent. 


Without distinc- 
tion of Sex. 


Without distinc- 
tion of Sex. 


Without dis- 
tinction of 
Sex. 


Male. 


Female. 


Male & 
Female. 


Male. 


Female. 


20 
25 
30 
35 
40 
45 
50 
55 
60 


£ s. d. 

2 3 7 
2 8 1 
2 13 5 

2 19 10 

3 7 11 

3 17 11 

4 10 7 

5 6 4 

6 7 4 


£ s. d. 

2 6 
2 4 9 
2 9 10 

2 16 

3 3 11 

3 13 8 

4 6 2 

5 17 

6 2 4 


£ s. d. 

1 9 10 
1 14 

1 19 

2 4 8 

2 12 

3 4 

3 12 5 

4 10 11 

5159 


£ s. d. 

16 4 
1 10 4 

1 15 1 

2 5 
2 7 6 

2 15 6 

3 7 3 

4 5 8 

5 10 8 


£ s. d. 
1 5 11 

19 5 
1 13 11 

1 19 9 

2 7 4 

2 17 8 

3 11 6 

4 10 

5 15 1 


£ 8. d. 
1 12 5 

1 14 7 

1 17 9 

2 2 6 
2 9 

2 18 3 

3 12 

4 9 2 

5 9 7 


£ s. d. 

15 
17 8 
1 10 11 
114 11 

1 19 8 

2 6 

2 15 

3 8 1 

4 6 2 


£ s. d. 

18 8 
1 11 1 
1 14 4 

1 18 8 

2 4 4 

2 12 1 

3 3 6 

3 18 7 

4 17 10 


£ s. d.£ s. d. 

18 517 9 

1 12 5 1 11 2 
1 

1 17 1 1 15 4 

1 

2 2 92 6 

1 

2 10 2 6 11 

1 

2 19 5 2 15 6 

3 12 43 7 4 

4 11 54 5 

1 

5 17 3 5 9 4 

1 


20 

25 
30 
35 
40 
45 
50 
55 
60 



HIGH AND LOW RATES DISCUSSED. 283 

Applying these considerations to life premiums, it is very clear 
that under a Table which assumes to make four per cent, of its 
money instead of three, the premiums for assuring any given 
sum ou«-ht not to be so large where the higher rate of interest 
prevails; and this is seen to be so. The preceding Table illus- 
trates this point. In the case of the Northampton and Carlisle 
Tables the rates at both 3 and 4 per cent, are given for the sake 
of contrast. The remaining examples are confined to the 4 per 
cent. Tables — the two last distinguishing between male and fe- 
male rates. 

It is seen, then, that almost any variation of rates may be de- 
rived from the same Table of mortality, and that they may be 
produced from either of two causes, viz., a variation in the rate 
of interest assumed, or a variation in the per centage of " load- 
ing." The careful reading of the following short Table will fully 
and clearly illustrate this point : — 

Premiums to assure £100 by English Life Table. 

Premiums with a " charge" of 

10 per cent. 20 per cent. 30 per cent. 
£2 11 9 £2 16 5 £3 12 

2 70 2 11 3 2 15 7 



Net" annual premiums at age 35, 

taking the interest of money 

at 3 per cent. 

£2 7 

at 4 per cent. 

£2 2 9 



Here are eight variations of premiums, and they might easily be 
increased to eighty. 

Believing that enough has been said to familiarize the reader 
with the general principles attending the construction of rates 
of premium, we may pass on to the next stage of the subject ; but 
we propose stopping by the way, and taking a glance at the oft- 
debated question of the relative advantages of high and low pre- 
miums, so far as the interest of policy-holders is concerned. 

It may seem hardly necessary to preface our observations by a 
truism which applies to many things besides life premiums, viz., 
that the highest rates are not necessarily the dear est , or the lowest 
the cheapest. The main consideration is the quality of the article 
the purchaser gets for his money ; and this holds good whether 
the article purchased be a pair of boots or a policy of assurance. 

Reverting to premiums, then, we see they are made up of two 
parts : the first that which is absolutely required to meet the risk 
of death : the other, the addition for the purpose of meeting ex- 
penses and contingencies. Now it is clear that if a person were 
purchasing a policy for £100 without any additions — or, as it is 
generally termed, " without profits" — the nearer the purchase 
money coincided with the net premium, under a recognised Life 
Table, the better. But if a person were assuring in a Mutual 
Office, where he was to participate either in profit or loss, the 
case might be very different. Assume for a moment the case of 
a Mutual Office which charged such low rates of premium as not 
to be sufficient to cover expenses, as well as the risk of death, 



284 HIGH AND LOW RATES DISCUSSED. 

what might be the position of the assured ? That those who 
died early would receive their claims in full, while those who 
lived to a later period, and had therefore contributed more 
largely to the funds, would find the Society in such a position 
as to be unable to meet their claims. On the ground of justice 
therefore, as well as prudence, no Mutual Office should adopt a 
scale of rates which does not come within the range of being per- 
fectly safe so far as human foresight can determine. Proprietary 
Offices, carried on simply as trading speculations, will take care 
never to run to this extreme. 

Take the opposite case, of extremely high rates. A person as- 
suring, w r ithout participation in profits, pays, under such circum- 
stances, a price far above the real value of the article he pur- 
chases, and gets no possible advantage by so doing : because the 
security is just as great in a properly constituted Office with mod- 
erate rates : not even to say greater, for the Office with moderate 
premiums is far more likely to have a sufficient number of as- 
surers at all ages to constitute a fair average ; without which, as 
we have already stated, the business of Life Assurance can hardly 
be carried on with safety. 

High rates in Mutual Offices are not open to the objections just 
stated : the objections, where they exist, are of a different class. 
Our own belief is, that moderate rates have a decided advantage 
over exorbitant ones under all circumstances, but like nearly all 
points in assurance practice, there is much to be said on both 
sides. In a Mutual Office, where the surplus or profits are divi- 
ded on an equitable scale — that is to say, where the assurers at 
every age receive a return in the shape of profits at the same ra- 
tio as they contribute to the profits — or, to be still more precise 
on this all-important question, in an Office where the surplus is 
distributed with due regard to the addition or loading to the 
premiums at all ages, high rates of premium maybe an advantage 
in this way — that the sum which the assured pays to the high- 
rate Office, over and above that which he would pay to an Office 
with moderate rates, being invested by the Office at a profitable 
rate of interest and on good security, and with its accumulations 
ultimately returned to him in the shape of profits, he may have 
realised a better rate of interest on this surplus, whatever it may 
be, than he could have made in any other manner. But take a 
case where the profits realised are distributed by some arbitrary 
rule, without regard to the principles of equity — as where the pre- 
miums are loaded the same at all ages, and the profits are distrib- 
uted in such a manner as to favor the young against the old, or 
the old against the young — a manifest injustice will result to some 
portion of the assurers in such Offices. 

We do not purpose here to enter more particularly into the 
question of the distribution of profits — that is reserved for the 
next division : we will, therefore, only add that all the cases we 
have just "supposed" exist in reality, and in a much more aggra- 



AUTHORITIES ON THE SUBJECT. 285 

vated form than we have yet presented them — and then proceed 
with the subject of premiums. 

Having declared ourselves in favor of moderate premiums, by 
which, we may here explain, we refer to those which have during 
a series of years been found adequate to meet all the ordinary 
risks of life, and to leave a respectable surplus in addition : such 
rates, as of necessity they must, being derived from a Mortality 
Table having no glaring faults in its construction — having, we 
say, committed ourselves to this view, we purpose, as is our cus- 
tom, to see how far the leading authorities on the subject will sup- 
port us in such a conclusion ; our desire here, as elsewhere, being 
simply to arrive at the truth. 

Commencing with a competent, yet impartial, authority, Dr. 
Farr points to a truth, obvious after what has been already 
stated, yet important to be kept constantly in mind, viz. — that the 
premium is increased by using a Life Table expressive of a high 
rate of mortality and a low rate of interest ; and conversely it is 
diminished under opposite conditions. He then adds : — 

" Although, no absolute rule can be laid down, it appears to be the most 
judicious course in a Proprietary Office to use a Life Table which expresses 
the average mortality of the classes of people who insure; to take interest at 
3 per cent., which is the natural average rate where there is no risk, and the 
rate most likely to be realized with certainty in transactions extending ovei 
a long series of years ; and finally to make such an addition as while it gua- 
rantees, to some extent, the proprietors from loss, yields them a fair profit." 
(Twelfth Annual Report.) 

Nearly all the writers on the subject of premiums take an op- 
portunity of having a " quiet fling," at the Northampton Table. 
Dr. Farr boldly asserts that — 

" By its use the Proprietary Offices have exacted enormous and unequal 
premiums from the portions of the community who happened to he ill-versed 
and ill-instructed in the intricate science of Life Assurance^ 

Another writer more quietly, but equally unmistakably, 

says : — 

" Where is the fairness of using a Table which demands premiums very 
much larger than the real risks from the young, while it admits older lives 
on more easy terms ? Ought the older lives to enjoy any privilege in this re- 
spect ? Quite the reverse ; for belonging to a class which is less known, and 
extending also in smaller numbers with results therefore more subject to 
fluctuation, the per centage added to the premiums deducted from a true 
Table ought rather to be larger in the case of old lives than in that of young 
ones. The best customers, both in number and quality, ought not to come 
the worst off." 

A writer in Chambers' Information, equally to be commended 
for his impartiality and clearness, enters into a more minute com- 
parison : — 

" The high rates are defended on various grounds. A Company making 
high charges, and consequently good profits, may be supposed to have more 



286 AUTHORITIES CONTINUED. 

stability than one making moderate charges ; while of a Society* pursuing 
business on the same plan, it may be said, that the overplus becomes a kind of 
bank deposit, to be ultimately realized by the depositor. "With regard to 
Companies, the defence may, or not be, sound according as business is man- 
aged discreetly or otherwise. The defence is of greater force with regard to 
Societies ; but even there it is not free from objections. The high-rate Socie- 
ties, proceeding upon the Northampton Table, commit a constant injustice to 
the young and middle-aged members in favor of the old. The needless am- 
plitude tends to occasion a careless, a less careful, use of them in construct- 
ing the concern : there is, for instance, a greater temptation to give large 
commissions to persons who, as it is said, bring business. But the greatest 
objection to a needless high scale is, that it must act as an obstruction to the 
first step in what is generally one of the most important moral acts of a lifetime 
— the effecting of Life Assurance. We would here be understood to draw a 
broad distinction between an unsound low rate, and one which is sufficient to 
satisfy a reasonable anxiety for security. Rates much below the first of the 
above three cases [referring to some examples taken from the Scotch Offices] 
would be decidedly unsafe, taking all contingencies into account. On the 
other hand, it ought certainly to be possible to transact perfectly safe business 
upon a medium of that scale. Those who, for further caution, prefer the next 
scale, must be said to pay highly for it, if they resort to a Company which 
gives no share of profits to the assured : if they become members of a Soci- 
ety, large periodic additions will be no more than their due." 

Mr. Charles Babbage says, — 

" I imagine it will not require much argument to show, that the more 
proper mode would be to determine, as early as we can, the real value of the 
risk, and consequently the amount of premium just sufficient to meet it, and to 
add to this such a per centage as will defray the expenses of management, 
and allow of a sufficient dividend to the proprietors, whose capital is a gua- 
rantee to the assured." 

This is precisely the process we have shown in the Table given 
at pages 279 and 280. 

Professor de Morgan, taking a more extended view of the sub- 
ject, says — 

" But there are reasons why the premiums of an Insurance Office need not 
be so high as the very limited number of data in their tables might seem to 
require. If the fluctuations from the average, which are within the most 
cautious definition of reasonable probability, were all to be encountered at 
once, or might be at once, it is difficult to say what premiums should be con- 
sidered too high. But this cannot be the case, unless, indeed, a pestilence 
might single out the members of an Insurance Office, or an earthquake 
should, by some extraordinary event, swallow them all up in the place where, 
by a most remarkable coincidence, they were all assembled together. Such 
extreme cases," he continues, " are not worth consideration ; and. we may take 
the chances of life and death as distributed over a large number of years. In 
the meantime, the surplus fund increases at compound interest, and the prob- 
lem is not whether a given number of lives will, on the whole, drop so much 
before, the predicted time, that a given fund will be destroyed, but whether 
this can happen so fast that it will outrun the increase of the fund at com- 
pound interest." 

The author of "Life Assurance: its Schemes, its Difficulties, 
and its Abuses" takes up the other side of the question. Refer- 

* The distinction between " Company " and " Society "must be observed with attention 
here as in other parts of this work. The former applies to a proprietary or mixed Office — 
the latter to mutual Offices only. 



AUTHORITIES CONTINUED. 287 

ring to cheap premiums, which he defines to be "rates which are 
considerably below the average demanded of the general body of 
the Offices," he says, — 

" We speak harshly of this system of cheap premiums, because we feel that 
it is an evil daily becoming more formidable. We are sorry to say it has be- 
come a common boast of many new Offices, in their public advertisements, 
that they offer the lowest rates of premiums possible, without compromising the 
safety of the Institution / Such advertisements speak volumes. Who, we 
would ask, would open-eyed venture to place so sacred a trust, as the future 
provision for a young family, in the hands of a Society which spontaneously 
acknowledged the charge of approaching so closely to the line which divides 
security from insecurity ? Should we be considered in possession of our 
senses were we to risk our necks by travelling on a railroad, the engineer of 
which, at the outset of the journey, promised to put the engine to its extremest 
speed, with the comfortable assurance that, however great the pressure on the 
boiler might become, it should be pi-eserved just short of an actual explosion ? 
Absurd as it may appear, such a promise on the part of the engineer, is not 
more preposterous than that daily held out by the cheap premium Offices." 

A writer in the North British Review, already several times 
quoted, speaking particularly of the high-rate Offices, says, — 

" The prevailing systems are, in reality, most unfavorable to the spread 
of Life Assurance among the general body of society. The grand object 
should be, to promote its extension among all who can avail themselves of its 
benefits. Instead of doing this by offering Assurance at low, but safe rates, 
these are kept so high as to deter many from attempting to assure, and to 
defeat many more who make the attempt, all in order to produce a surplus 
fund for the long livers. New entrants not only pay an adequate premium, 
but, in addition, what may be called a Tontine-tax, in the distribution of 
which they may never share ; and thus Life Assurance, instead of being sim- 
plified, and cheapened, and popularized as it might be, within the limits of per- 
fect safety, is clogged and complicated, by the super-addition of an expensive 
system, the very opposite of Life Assurance in its nature and tendency" 

The writer touches upon a point which will be very fully dis- 
cussed in our chapter on Bonuses. It does not necessarily follow 
that the "loading" should be converted into a Tontine Tax, 
although we grant that this is sometimes the case. All depends 
upon the periods and mode of division of the surplus. The same 
writer will then be allowed space for the further development of 
his views. Meantime, we confine ourselves to the immediate 
question of the relative advantages of high and low rates. 

The writer of some able papers in the Morning Herald (Dec. 
1849), speaking of the evil consequences resulting from the varia- 
tions in the several Mortality Tables, says, — 

" Hence also the various apparent differences which still exist amongst the 
Offices, both as respects the rates of premium charged, and the per centage of 
profits returned to assuring parties. These differences cause much perplexity, 
and go a great way towards limiting the operations of these Societies among 
the people at large who cannot clearly comprehend why some establishments 
should return enormous bonuses, while others return but little, and some none 
at all. They have but limited means of judging why or wherefore such dis- 
tinctions should arise, or of seeing clearly what those who pay much atten- 
tion to the subject will understand, that the general results of all such As- 
sociations (honest and proper management being granted) are nearly alike, 



288 AUTHORITIES CONTINUED. 



id profits being more or less insured in proportion to the high or 
low charge of premium, if at all within the barrier established by the Carlisle 
and the Northampton Tables. It is for the assurers themselves to decide 
whether they are disposed to pay in advance high premiums, proved to be really 
unnecessary, satisfied with the promise of high bonuses in return, or are desirous 
to restrict their actual outlay in premiums to an amount which, though more 
moderate, is yet securely based on modern experience" 

On another occasion, Professor M. de Morgan compares the 
relative advantages resulting to the Offices as between high and 
low rates : — 

" According to the Carlisle Table, the premium which should now be paid 
to insure £100 upon the life of an individual aged 20 is £1 7s., at four per 
cent. According to the Northampton Table, at 3 per cent., the same premium 
should be £2 4s. Taking the first premium, and assuming its Table, the Of- 
fice will not be sure of avoiding loss until the party has lived 35 years, by 
which time the premiums, with their accumulated interest, will have passed 
£100. It is little more than 2 to 1 that a life of such an age shall live 
beyond 32 years after the contract. Taking the premium of the Northampton 
Table, the party must live 28 years before the Office can gain by him ; and it 
is about 10 to 7 that he will outlive this term." 

Mr. Sturrock, who is the champion of low rates, as well as 
Mutual Offices, says : — 

" It must appear, from the full investigations that have been made into 
the law of mortality in this country, and the results of the long experience 
of numerous Companies, that the premiums charged by the greater part of 
the older Offices are exorbitant, and unnecessary for the safety of the business 
of Life Assurance. It follows that the public can derive every advantage of 
Life Assurance from Companies using the more moderate premiums. It is 
most important that the knowledge of this fact should be widely spread, that 
the benefit of assurance may be extended to the larger and more numerous 
class of the community, who have hitherto been discouraged by extravagant 
premiums from availing themselves of its benefits." 

Mr. George J. Soper, in his clever pamphlet, also discusses the 
subject impartially : — 

" Some Societies charge higher premiums than others which profess precisely 
the same principles, but the object of, and the plea for, such extra charges, 
such advanced rates beyond the actual law of mortality, are generally well 
understood to be the desire to gain a current popularity by making large 
returns in the name of bonuses or profits. Against such a line of policy no 
fair objection can be urged, for the choice is with the applicants, and, as before 
observed, the law of mortality is so well known that the average life risk 
may be ascertained to a very close figure. At all events, it is perfectly right, 
just, and proper, — it is, in fact, demanded by common prudence to require a 
rate of premium more or less above the present accepted value standard of 
mortality. There being, therefore, no deception in the matter, persons are 
left to decide for themselves, whether they would prefer a high premium 
scale, relying on the Company returning all the extra charges in after bonuses 
(for the Companies have that option, and therefore high premiums may not 
always be followed by corresponding bonuses), or the lower, though still an 
authorized and acknowledged safe standard, which could not, of course, make 
any great impression with bonuses, for the certain fulfilment of their expecta- 
tions ; all such apparently enticing offers should be as lanterns and watchmen 
before the house ! ! In our opinion, any Society offering prominently the 



DEDUCTIONS FEOM THE PEECEDING CONSIDERATIONS. 289 

pretended immediate advantage of a rate of contribution much below the 
average, or, in other words, cheap premiums of Assurance, so far from confer- 
ring a benefit on the assurer is in reality, by that very circumstance, holding 
out to him a sign which ought to determine him in the rejection rather than 
in the selection of an Office." 

But we have already anticipated these objections, and need 
not pursue them further here. 

Mr. Neison stated before the Select Committee, in 1853, boldly, 
" all the premiums charged are in practice, whatever .they may 
be in theory, much more than adequate to meet the liabilities. 
From the experience I have of Life Institutions, that is the prac- 
tical view I take of the subject." 

Mr. Riley said to the same Committee, " I should observe, that 
the tendency of Tables of Premiums of late years has been rather 
to increase than to decrease ; there is an impression that Offices 
are getting lower in their terms ; the result of my observations 
is, that they are getting higher ; and it is necessary that they 
should get higher, for they have to spend a great deal of money 
in the acquisition of business, which older Offices have not." 

It would, however, appear to us very unfair, that rates should 
be formed sufficiently high to meet the necessarily large prelimi- 
nary outlay of establishing an Office. This falls within the pro- 
vince of capital in a Mixed or Proprietary Office, or of the guar- 
antee fund in a Mutual one. It would be a great barrier to the 
progress of Life Assurance, that such charges should be provided 
solely by the premiums. Too much of the premiums are, indeed, 
already expended for such purposes : hence the failure of so many 
Offices of late. 

Out of the preceding considerations the following conclusions 
may be fairly drawn : — 

1st. — That with regard to Proprietary Offices the premiums to 
be equitable certainly ought not much to exceed the net rates 
under the 3 per cent. English Table No. 2. 

2ndly. — As to Mutual Offices, that provided the distribution of 
the profits be conducted on an equitable plan, with due regard to 
the " loading " of the premiums — which is held to be the chief 
source of profit — it is immaterial what the rate of premiums may 
be, provided it be not too low; and 

3rdly. — As to Mixed Offices, in which the proprietors take some 
portion of the profits with policy-holders, the rates should be so 
constructed as to yield, under proper management, a fair share of 
profit, always having especial regard to the interests of those who 
contribute the profits, rather than to those who simply participate 
in a portion of them ; and with this view such rates as those given 
by the 3 per cent. English Life Table No. 2, will be found abun- 
dantly sufficient. 

At the conclusion of this chapter will be given Tables of rates 
of all the existing Life Offices, at each five years of age, from 15 



290 



ANNUAL PREMIUMS. 



to 60 (the usual limits in each direction) under an arrangement 
which will be found both equitable and convenient. 

In comparing rates of premium a moment's reflection will show 
that a simple alphabetical arrangement of the Offices is of the 
smallest possible value ; calculated, indeed, rather to mislead than 
to assist. The eye first rests upon say a Mutual Office, then a 
Proprietary one, and next a Mixed one ; and astonishment is ex- 
pressed at the variation in the terms thus presented. The Mutual 
Office having to raise a guarantee fund out of its premiums, neces- 
sarily charges much higher premiums than a purely Proprietary 
Office, which, having a subscribed capital, and having no bonus 
additions to make to its policies, can naturally afford to issue 
policies at minimum rates ; that is, with such a loading only upon 
the net premiums as will leave a fair margin of profit for the 
shareholders on the business transacted. The Mixed Offices com- 
ing between the two with medium rates. 

Here, then, we see that the preliminary step to any comparison 
of premiums is to ascertain the principles or constitutions of the 
several Offices placed in contrast. This is precisely what is done 
in the following Tables. The first Table gives the rates of the 
Mutual Offices only ; the second, of the Mixed Offices ; and the 
third, the rates of the purely Proprietary, or non-bonus giving 
Offices, and of the Proprietary branches of the Mixed and Mutual 
Offices. This arrangement will greatly facilitate comparisons, 
not only between the Offices, but also in regard to the probable 
or prospective advantages. 

ANNUAL PREMIUMS FOR ASSURING £100. 





Age 20. 


Age 30. 


Age 40. 


Age 50. 


Age 60. 


A 


£ s. d. 
2 3 7 

2 16 


£ s. d. 
2 13 5 

2 11 1 


£ s. d. 
3 7 11 

3 5 6 


£ s. 
4 10 

4 8 


d. 

8 

4 


£ s. d. 

6 7 4 

6 5 4 


B 


1 14 7 


2 4 3 


2 19 9 


4 8 





7 7 


C 


1 11 9 


2 2 


2 17 1 


4 2 





6 10 9 


D 


1 15 8 


2 16 


2 14 9 


4 1 


7 


6 6 7 


E 


1 5 11 


1 13 11 


2 7 4 


3 11 


6 


5 15 1 


F 


16 4 


1 15 1 


2 7 6 


8 7 


3 


5 10 8 



ANNUAL PREMIUMS. 291 

" The premiums opposite the letter A have been used by more than twenty 
Offices, which have been established from ten to fifty years and upwards, and 
in every instance they have made very large profits. Premiums ranging- be- 
tween the rates opposite A and B have been used by about thirty Offices ; and 
where they have been long enough established to exhibit a state of their 
affairs, the premiums in every case have yielded large bonuses. The pre- 
miums opposite B, are those of the London Economic Office (Mutual), of 
twenty-three years' standing (in 1846), in which bonuses paid out of three- 
fourths of the profits amounted on an average, at the third division in 1844, 
to no less than 83 per cent, on the premiums paid. The premiums opposite 
C, are much about those which have been charged by long-established Com- 
panies, making use of the non-participating scale ; and the business of all 
these Offices has been successful. The premiums opposite D, are those of the 

Scottish Provident (Mutual) and have been found to yield a very 

considerable surplus. The premiums opposite E, are those deduced from the 
combined experience of seventeen old-established Offices. And those opposite 
F, are founded on the Carlisle Table, reckoning money in the two last cases at 
4 per cent. 

The preceding Table, prepared by Mr. Sturrock, and the note 
appended to it, viewed in conjunction with the other Tables in 
this chapter, will be found useful in judging of the equity of the 
rates in the Tables which follow it. 

One or two of the Offices, it will be seen, have a special set of 
rates for female lives. We have already offered some observa- 
tions and statistics on this point in our Chapter on Mortality Ta- 
bles, and will not add anything further on the subject here. 

It is believed that the following Tables contain the rates of all 
the existing Offices correctly classified ; but so many changes 
have lately occurred with the Offices that it is very difficult to 
say on one day what may be correct on the following. Any er- 
rors which may be found will be purely the result of accident. 

The Offices not found named in our Table of non-participating 
rates either do not issue non-participating policies, as the Econo- 
mic, the Sun, the National Provident, the Scottish Equitable, 
Scottish Provident, and several others, or do not publish them, as 
the Scottish Widows' 1 Fund, Universal, Law Life, Kent Mutual, 
and one or two other Offices. 



TABLES OF RATES 



OF ALL THE 



EXISTING LIFE OFFICES. 



Table I. 

RATES OF THE MUTUAL OFFICES. 

Table II 
RATES OF THE MIXED OFFICES. 

Table III 

RATES OF THE PROPRIETAR T OFFICES. 

Table IT. 

AATES OF THE PROPRIETARY BRANCHES OF THE MIXED AND 
MUTUAL OFFICES. 



294 



MUTUAL OFFICES. 



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DIVISION IV 



BONUSES: HOW DERIVED, AND THE PROPER TIMES AND 
MANNER OF DECLARING THEM. 

" It is a singular fact, that, on a matter apparently so simple as the profits of 
a Life Assurance Society, and also so important as to be constantly before 
the minds of men of business, the most opposite ideas are entertained and 
acted on. Sums of money, amounting to millions of pounds, are actually dis- 
tributed, not according to what is just and equitable, but according to some 
mere opinion founded on some scheme for obviating an error by the com- 
mission of another. The crudest of these ideas, and that one which I must 
first discuss, is this — that the profit on any policy is the excess of the 
premiums paid over the sum assured ; and the most absurd of its corollaries, 
that, therefore, no member who has not paid up, in premium and interest, 
the full sum assured upon his life, can be entitled to share in profits to 
which he has contributed nothing." — Sang, on Life Assurance. 

The subject of bonuses is of such peculiar importance in con- 
nection with the understanding of the entire principles and 
working of Assurance Offices, that we have thought it desirable 
to devote a special division of this work to its consideration and 
discussion. It is one also in which the assuring public takes con- 
siderable interest. 

The term " bonus" signifies, according to the lexicographers, a 
premium, a benefit, or an advantage, and therefore has no direct 
or peculiar reference to Life Assurance except by association of 
ideas : although in this respect, we must admit, it is highly signi- 
ficant. Nor is the term " profits" much more correct ; for, as we 
shall see, bonuses are only in part made up of profits. The 
correct mode of expressing what is generally implied by bonus, 
is "participation in surplus." Bonuses are, in fact, derived, or 
ought to be, out of the surplus funds of Assurance Offices. 

So far preliminary, and we fear pedantic ; but the importance 
of the distinction will fully appear as we proceed. 

The question of bonuses will re-open nearly all the points of 
practice we have already discussed. It brings us at once to the 
subject of premiums : because the " loadings" or additions made 
to the " net " premiums not only constitute the chief source of 
the surplus, but give the policy-holders the right of participating 



302 BONUSES OF THE EQUITABLE OFFICE. 

therein. It opens up the subject of interest and investments: 
because if a greater rate of interest be realized than that provided 
for, or anticipated, in the tables, this source of profit goes to 
increase the surplus fund of the Society. It brings us to the con- 
sideration of selection : because any profit which may result from 
this source must be to the manifest advantage of the funds of 
the Society. And it has a very direct bearing upon the expenses 
of management: because all money so expended is drawn from 
what would otherwise constitute a portion of the surplus funds. 
Hence, if we appear to approach the subject with some care, and 
even formality, we shall be able to justify ourselves in so doing. 
That we have not unnecessarily multiplied these considerations 
the reader will presently have abundant proof. 

All who have thought much upon the subject will agree with 
the editor of Harvey Tuckett's Monthly (American) Insurance 
Journal, " That there is no subject of greater importance to the 
whole body of insurers than a just estimate of the actual divi- 
dend-giving (bonus) power possessed by Life Insurance Com- 
panies. If once," he adds, " the public have ascertained and are 
convinced of the actual limit of this power, all promises of 
erroneous benefits to be bestowed will evaporate before the good 
sense of the community." 

It is certain that there are few points in connection with Life 
Assurance upon which more erroneous notions prevail than upon 
the entire subject of bonuses : and yet we venture to think there 
is no part of the subject capable of being rendered more simple. 
It is at least a very generally prevailing, if not a popularly 
accepted, notion that Life Offices must realise large profits ; and 
the bonuses of the Equitable Office are mostly pointed to as con- 
firmatory of the notion. We will not stop to dwell on the bitter 
disappointment which is in store for many of the victims of this 
delusion, but will at once grapple with the practical part of the 
subject. With respect to the bonuses of the Equitable let us 
once for all say they arose from a combination of circumstances 
which can never occur again. These circumstances have indeed 
already been passed in review ; we will, therefore, only now 
epitomise them. The high rates of premium have been abolished 
in favor of a more equitable scale. Money can no longer be 
invested in the funds in a manner to yield a return of nearly cent, 
per cent, on the principal. The policies now issued are not, as 
formerly, for short periods, leaving a considerable profit to the 
Office, but are mostly whole life policies, for which some consi- 
deration is expected if surrendered to the Office. Assurers also 
now expect, and are generally guaranteed, participation in the 
surplus at some early date after the formation of the Society, 
and do not wait, as formerly, until an unmistakably large fund has 
accumulated. The Equitable did not make any division of its sur- 
plus for the first twenty years. So that, in fact, the circumstances 
which led to the great accumulations of the Equitable have entirely 



BONUSES OF THE EQUITABLE OFFICE. 303 

changed. The methods of distributing the surplus have also 
been changed, and, in many instances, improved. Formerly, as it 
has been sagaciously observed, D. E. and F. received two or three 
times the sum to which they w T ere entitled, simply because A. B. 
and C, " who die during the days of a caution, which has since 
been shown to be unnecessary," did not get their share of the 
then existing surplus. 

That we may properly proceed with this investigation it is 
desirable to divide it into several chapters, corresponding to the 
several divisions of the subject. 



CHAPTER I. 

SOURCES OF SURPLUS IN AN ASSURANCE OFFICE. 

In order to be in a position to judge of the principles upon 
which an equitable division of surplus should be made, it is appa- 
rent that the reader should be thoroughly familiar with the sources 
of such surplus : failing this, it would be as impossible to under- 
stand the subject as to steer a ship without understanding the 
workings of the compass. We therefore purpose to follow out 
these points minutely. In tracing out the several sources of pro- 
fit we are simply complying with the requirements of a well- 
known maxim, which (if the levity may be pardoned) runs thus : 
" first catch your hare, and then cook him." But in all matters 
of bonus calculation the " cooking " should be strictly guarded 
against, not to say constituted a penal offence ! In the absence 
of correct notions as to where the profits come from, we may ex- 
pect very crude and unsatisfactory notions how they should be 
disposed of. 

While we shall have occasion to show that the principal sources 
of profit are pretty well agreed upon by Actuaries, we shall also 
have occasion to notice that the relative value of these several 
sources is the subject of very considerable differences of opinion. 
After a careful consideration of the whole question, and some 
personal experience, we have adopted the following classification : 
— 1. The loading of the premiums. 2. The rate of Interest 
realised on Investments over and above the rate assumed in the 
Tables of Premiums. 3. The profits on non-participating and 
Term Policies. 4. The profits derived from Lapsed and Sur- 
rendered Policies. 5. The advantages arising from selec- 
tion of lives. And, negatively only, may be added to these, 
Economy of management. 

Before proceeding to support the above arrangement it appears 
desirable to glance at the classification adopted by several able 
writers. 

Dr. Farr, in his paper explanatory of the English Life Table 
No. 2, omitting the chief source, viz. the " loading," which he 
speaks of as arbitrary, says : — 

" The sources of profit in an Insurance Office are — (1.) The careful selection 
of Lives. The payments on deaths in the first year or years, may be consider- 
ably reduced by a skilful selection. The saving is legitimate profit. A strict 
exclusion, however, of all but the best lives necessarily diminishes the amount 
of business. (2.) The investment of its funds securely at a high rate of inte- 
rest is another source of profit. Thus, if a stock of £1,566,644, which at 3 per 
cent, interest will meet the requirements of the Life Table, can be invested, as 
it has hitherto been by many Offices at 4 per cent, interest, the profits from 
this source will be £15,666 in the year. (3.) The gains on Insurances on the 



VARIOUS OPINIONS ON SOURCES OF PROFIT. 305 

non participating terms, or on the lapse of policies, also swell the profits. The 
price which the Office pays leaves it a considerable profit. If the life hold on 
in a Mutual Office it participates in the surplus. (4.) The profits on all invest- 
ments are reducible to Interest; but it may be worth considering the case sepa- 
rately if such investments in the funds as were made by the Equitable and 
other Offices when £100 stock was acquired for £50, £60, £70, or £80 money, 
and will sell for £90 or £100 money, according to the state of the market. 

The profits from these sources alone cover all the expenses in some 

Offices, and leave a surplus."* 

Mr. Jellicoe, Actuary of the Eagle Assurance Office, confirms 
this view in other words, but places the loading first on the list. 
He says: — 

" The conditions on which the amount of bonus depends are — (1.) The rates 
of premium charged ; (2.) The rates of mortality and interest which actually 
prevail ; (3.) The time elapsed from the completion of the assurance ; and (4.) 
The proportion which the yearly expenditure bears to the amount of business 
annually transacted." And he adds, "there are, no doubt, others of an acci- 
dental description ; such, for instance, as the abandonment of assurance poli- 
cies by their owners ; but although this was a matter of frequent occurrence 
formerly, it is no longer so at the present day ; and it is very important to 
bear in mind, that it is only the [surrender] value of the policy which in such 
cases falls into the general fund, and not the amount of premiums paid in re- 
spect of it, as the statements frequently put forth would seem to imply." 

Another writer, to illustrate the advantages arising from a favo- 
rable rate of mortality, says : — 

" A young man will pay considerably less than an old man, because the 
Society will expect to receive a greater number of premiums from him before 
they will be called upon to pay his family the amount of his policy : for a 
similar reason, if the general average of life prove to be longer than was ori- 
ginally anticipated, the assurers, as a body, ought to pay considerably less 
than they otherwise would have paid had longevity been less favorable to the 
Society. And this surplus or difference, whatever it may be, between what is 
and what ought to be paid, constitutes what is called profit, out of which a 
bonus is declared."! 

Mr. Ingall speaks of interest as one source of profit, " and per- 
haps," he says, " it may be considered the principal one." " But," 
he adds, " I consider there are other sources which, in the long 
run, would be quite equal to the profits arising from the differ- 
ence in the rate of interest." " One is a careful selection of lives ; 
another is that when the policy is surrendered the Office does not 
give the whole amount, which it would reserve as a matter of 
security, and the proportion returned varies very much in differ- 
ent Offices; perhaps it would vary between 20 and 30 per cent. 
on the amount of the premium paid." 

With some of the earlier Offices the profits from surrender, or 
rather from forfeited policies, was no doubt very considerable : 
for instance, Mr. Morgan, in his address to the Court of the Equi- 
table, in 1795, says, " I do not believe one half of the assurances 
which were made during the first 25 years, for the whole of life, 

* Tide Letter in Twelfth Report of Registrar-General, 
t Life Assurance— Its Schenies, &c. 



306 THE REAL BONUS-GIVING POWER. 

have been either continued till they became claims, or eve?i sur* 
rendered for a valuable consideration" In another part of the 
same address, he speaks of these as forming " a very large propor- 
tion of the profits of the Society." Circumstances, however, have 
since very much changed. 

Some of the early Offices also, as the Amicable, the Equitable, 
London Life, the Mock, and still later the Scottish Equitable, 
charged entrance fees, and up till very recently the policy-stampt 
and medical fees were paid by the assured. They are now, we 
believe, almost invariably paid by the Offices. Here, then, not 
only is one source of revenue cut off, but several items of expen- 
diture added. 

Returning to the authorities, Mr. Samuel Brown, Actuary of 
the Guardian Office, limits the sources of profit : — 

"In any Life Assurance Company there are but two sources from which 
profit can be derived ; first, that the premiums have been improved at a 
higher rate of interest than that which formed the basis for their original 
calculation ; and secondly, that the number of deaths in the Society has been 
actually less than was estimated by the table of mortality from which the 
premiums were formed." "Profits," he continues, "under whatever head 
they may be concealed, must spring from one or other of these variations 
from the original assumption. As all the Offices have had the benefit of the 
experience of those Companies which, at an early period, undertook what 
then appeared the great risk of an untried enterprize, none would have been 
justified in starting with insufficient premiums ; and, consequently, all have 
been presumed to obtain a considerable amount of profits, even from their 
earliest establishment, unless, indeed, the amalgamations which are occasion- 
ally used for puffing in the public papers, disguise a disagreeable truth under 
the profession of advantage to the assured." 

He properly remarks on the subject of investing the funds of 
an Office at high rates of interest that, " as a general rule, where 
greater gain can be acquired than is to be secured in the public 
funds, it must be with increased risk of loss." Most of the Offi- 
ces have been very fortunate in this particular, although a few 
exceptions could be named. 

Mr. Sturrock goes more deeply into the question : — 

" In considering the effects of the large profits resulting from the business 
of Life Assurance, there is, he says, " no point about which so much general 
misconception prevails as that of bonuses. The experience of nearly a cen- 
tury has proved that these must, in all cases, exist where certain rates of pre- 
mium are exacted. Bonuses are generally termed profits ; out they are not so 
in the true meaning of the term. If a merchant engages in a speculation, he 
does so because, in the exercise of a cautious judgment, he believes he is safe; 
but he hasno proper means of knowing how great the profit or loss may be. 
In such business the term profit is properly used, as applicable to uncertain 
events. The case is quite different with regard to a number of Life Assur- 
ance transactions. These are entered into after premiums have been fixed 
by men of science on known and accurate data, for the express purpose of 
avoiding any chance of loss over the mass of risks undertaken. Bonuses are, 
therefore, the necessary consequence of Offices charging premiums higher than 
their obligations require ; and they do not arise from the fortunate issue of 
any speculative enterprize." 



WHAT DR. FARE SAYS ON THE MATTER. 30*7 

Mr. Sturrock, of course, only refers to Offices which are under 
sound and economic management; and he continues, "unless this 
additional premium were given away to proprietors, the Office 
could not avoid giving bonuses, as the only means of returning 
the surplus premiums paid by the assured." 

With respect to the loading, it is a perpetual, and to each par- 
ticular Society, a uniform source of profit so long as the premium 
income remains, and constantly increasing with it : it is the real 
bonus-giving power • and, as such, is viewed and spoken of by the 
majority of actuaries. Mr. Jellicoe refers to it as " the provision 
for future surplus and expenses ;" Mr. Pinckard, as " profits in 
anticipation ;" Mr. Jenkin Jones, as " marginal guarantee ;" Mr. 
W. T. Thomson, as " reserve guarantee ;" Mr. Reddish, as " the 
loading intended to provide for expenses and profit /" and so on 
throughout the list. In fact there can be no two opinions as to 
the real effect of the "charge" on the premiums, over and above 
the portion expended for expenses of management. 

Dr. Farr, although he does not include the loading in his sum- 
mary of profits already quoted, makes frequent allusion to it in 
other places. Thus : " after deducting the cost of management 
from the ' charge'* on the premium the rest of that charge may 
be fairly viewed as a probable surplus, as it is, indeed, assumed 
to be in fixing the rates of premium either of a mutual or of a 
proprietary Office." 

But the principal aspect in which we have to view the loading, 
here, is that the payment of it gives all participating policy- 
holders an absolute right in the surplus funds of either Mixed or 
Mutual Offices. That portion of the loading which is not applied 
for expenses, or contingencies, finds its way into the general funds 
of the Office. From these, it — with other sources of profit — be- 
comes, so to speak, separated by the process of actuarial valua- 
tion ; and it then, for the first time, assumes a disposable form. 

The importance of this point to policy-holders may be fully 
seen by a single example. Take the case of an office using the 
Carlisle 3 per Cent. Table ; but, in reality, making four per cent, 
on its investments, as most well-managed Life Offices do, at the 
very least. Assume such Office to experience no greater mor- 
tality than that predicted by its mortality table — and, (for the 
purposes of illustration) further, assume that it has no expenses 
ot management — then see what may actually be done out of the 
premiums charged under such table. The premiums demanded 
for assuring £100 will actually assure the following sums : — 

■ At age. . . .20. . . .£166 Age. . . .35. . . .£157 Age. . . .50. . . .£148 

" ....25.... £163 " ....40... £155 " . . . .55. . . .£144 

" ....30.... £160 " ....45.... £152 " . . . .60. . . .£141 

The inequality in favor of the younger ages arises from the 

* " Charge" is simply another term for loading. Writers constantly speak of rates as 
" charged" after they have been subjected to the process of loading. 



308 ON THE SURRENDER OF POLICIES. 

supposition of a higher rate of interest being made than that as- 
sumed in the table of rates — the greatest advantage from this 
cause being in connection with the younger lives.* 

Now no Office would like to assert that the expenses of 
management would exhaust the differences between £100 and 
the sums named in the above example — particularly when many 
of them assert that the profits on lapsed policies more than meet 
this entire outlay. So that we are fairly entitled to hold, that, 
even the rates drawn from the most favorable mortality table 
known — the Carlisle, from which is deduced the lowest rates of 
premium in use — will, under proper management, produce a very 
considerable surplus from loading, leaving out all the other 
sources of profit above-enumerated. In our chapter on the selec- 
tion of an Office we shall have to refer the reader back to this 
point. 

The important results which accrue from the investment of the 
funds of a Life Office — at a higher rate of interest than that as- 
sumed in the tables upon which the Office is founded, in addition 
to what is shown in the preceding paragraph — have been fully 
explained in our chapter on premiums: and we have only to re- 
fer the reader back to page 283 to bring the whole matter fully 
before him. 

The profits resulting from the non-participating and short term 
policies, or from any other class of policies to which participa- 
tion is not given, will depend, first, upon the amount of such busi- 
ness transacted and, next, upon the rates of premium charged. 
As a general rule the rates for this class of business are calculated 
to afford a handsome profit, as may be seen by reference to the 
table of rates (No. 3) given at p. 299. In some cases these rates 
equal those charged by Offices for participating policies where large 
bonuses are added ; and, in hardly any case, do we find them so 
low as we think they should be now that the risk of life assur- 
ance is so well defined. They, certainly, are not sufficiently low 
to induce persons to forego all bonus advantages and, hence, are 
only used in business purposes where the persons paying the 
premium, probably, have no direct interest in the policy except 
to have it carried out at the lowest possible cost. 

On the subject of surrendered policies we have already offered 
some remarks {vide p. 250). With respect to lapsed policies they, 
undoubtedly, are a source of profit — although, certainly, not 
nearly to the extent popularly supposed. What the Office di- 
rectly gains, by a lapsed policy, is the difference between the 
premiums actually paid and the natural premiums for the corre- 
sponding ages — less, however, any expenses incurred, such as fees 
for medical examination, policy stamp, and agency commission ; 
and when all these items are taken into account — if the policy 
lapse with only one premium paid — the Office is, probably, in- 
volved in a direct loss. We now refer the reader to the views of 

* Vide some examples in the National Encyclopaedia. Art., " Life Assurance." 



ADVANTAGES FROM SELECTION. 309 

Mr. J. J. Downes on these points : he takes a thoroughly practical 
view, and we consider his conclusion sound : — 

" I think there is an erroneous impression on the public mind with respect 
to the profit the Office makes on lapsed policies. All the Society can gain, 
by the lapse of a policy, is the value of it at the date of its lapse, which is 
considerably less than the amount of the premiums which have been received 
upon it ; but, then, the Office loses a portion of its business : if that be a pro- 
fitable business to the Society, the lapse of that policy is a loss and a prejudice 
to it, to a certain extent, because as all the principles of Life Assurance are 
based upon that of averages — and the averages become more uniform, in pro- 
portion, as the number of insurances is great — so any diminution in the num- 
ber of assurers in an Office is, to a certain extent, a prejudice to the remaining 
business of the Office. The same reasoning (he continues) will apply to the 
purchase of policies. The Company, certainly, does make a small profit by 
the purchase of a policy, by not giving what is called the full Office value for 
it, but it is a very small profit, indeed ; and, I think, it loses more by the loss 
of business and connection, as it would be quite certain that a party tendering 
a surrender of his policy is conscious of being in good health — and it is not 
likely to become a claim on the Society for some time — and therefore, in the 
party's own estimation, the Society is losing a portion of very good business." 

Mr. Ingall, we have seen, takes a more favorable view of the 
profits resulting from these sources, although, on the general sub- 
ject of profits, he says : — 

" I consider the public have very exaggerated notions of the profits on 
Life Assurance; and those profits are not likely to be so great, for the future, 
as they have been formerly, because the interest of money is lowered, and 
there are not so many policies discontinued for which no consideration is paid ; 
and the business, in most Offices, is carried on at a greater expense now than 
formerly. Those things (he adds) will, in my opinion, tend very much, for 
the future, to diminish the disposable surplus of a Company." * 

The advantages arising from selection in a pecuniary sense we 
have already discussed. It does not follow that because in the 
end select lives constitute no better average than that presented 
by the general mortality returns of the kingdom, that therefore 
selection is of no advantage. It is admitted by all authorities 
that select lives do present better averages for a certain (unde- 
fined) number of years after selection : and here at least a source 
of profit is obvious. If the persons who are expected, by the 
Tables, to die in the first year do not die till the second year, the 
advantage to the Office is clearly the receipt of an extra year's 
premium, and the interest realised upon the principal sum which 
has to be paid at death : and so on for each additional year over 
which such benefit extends. Now this when applied to a great 
number of lives will be no mean source of profit; but it is one 
which will only be participated in by Offices under strict manage- 
ment. 

It is undoubtedly from this source that many Offices are en- 
abled to declare the large bonuses which frequently characterise 
"first divisions of profits" — bonuses which the Offices find it 
afterwards impossible to maintain honestly. Against the tem- 
porary advantages of selection in a young Office may undoubted- 
ly be placed the greater proportionate expenditure to which as a 

* Vide Evidence before Select Committee. 1853. 



310 DISTINCTION BETWEEN SURPLUS AND PEOFITS. 

young Office it is subject ; and unless some plan of meeting the 
preliminary expenditure similar to that we have proposed in our 
chapter on "management expenses," be adopted, the one may be 
set off against the other. But all these points will be reviewed 
in our chapter on the " finance of life assurance," in the present 
division. 

Taking a more critical view of the subject, a distinction strikes 
us which it may be useful to point out here : that is, a distinction 
between surplus and profits. The former may be held to arise 
— assuming a correct Mortality Table to be employed — 1. From 
the " Loading " — less expenses and losses ; and 2. From the re- 
alisation of excess of interest. The profits may be held to arise 
— 1. From the iss&e of non-participating and term policies. 2. 
From lapsed and surrendered policies ; and 3. From the favor- 
able selection of lives. This being simply an altered classifica- 
tion of the sources already named. 

Now in an Assurance Office professing to be guided by the 
principles of strict equity, a reason for this distinction could be 
shown. The surplus we should at once assign to the policy- 
holders as belonging to them exclusively : for if the conditions 
which gave rise to it could have been accurately determined at 
the time of calculating the premiums the amount might have 
remained in the pockets of the assured, for the premiums in the 
aggregate would have been less by the amount of the surplus 
so derived. This will apply to policy-holders in Mixed or 
Mutual Offices. In a Proprietary or non-participating Office the 
assured voluntarily exclude themselves from such benefit. 

Following out our proposition, the profits, as distinguished 
from the surplus, remain to be disposed of. These in the case of 
a Mixed Office should belong entirely to the shareholders ; and 
in the case of a Mutual Office should go to the formation of a 
reserve fund to preserve the stability of the Society, as subscribed 
capital provides for or guarantees the stability of a Mixed Office. 
In the case of a purely Proprietary Office the profits from all 
sources go to the proprietors, and therefore no such distinction as 
we have named applies to them. 

We are fully aware that to carry our proposition into practice 
would involve some considerable additional labor, both at the 
periods of actuarial investigation, and at other times ; but those 
who are familiar with the amount of energy and talent continu- 
ally brought to the solution of such questions by professional 
actuaries will agree with us that neither difficulties nor actual 
labor would be preventives to the plan, provided it were believed 
to be advantageous. 

We introduce the point here as one of the considerations natu- 
rally arising out of our subject, and whether it be pursued prac- 
tically or not we are quite sure that the recollection of this dis- 
tinction will greatly facilitate the complete understanding of the 
bonus question ; and in this our present object will be fully ac- 
complished. We now leave the point till we come to discuss the 



VIEWS OF THE NORTH BTITISH REVIEW. 311 

various modes of distributing the surplus. Vide chapter 4 of 
this division. 

We cannot conclude this chapter more appropriately than by- 
referring the reader to the following remarks, from an article in 
the Worth British Review, several times before quoted. All the 
leading points connected with bonuses are there discussed im- 
partially — and we are glad to be able to strengthen our position, 
even at the expense of some space — and we may add, to instruct 
the reader from such an able source. The writer says : — 

" It should now be easy to explain how what are called 'profits arise, and to 
show how important it is that these should be divided upon sound and equi- 
table principles. Profits are the surplus contributions of the assured above what 
is found to be necessary to meet the risks undertaken by the assuring Office. In 
the Case of a Proprietary Company, these may be correctly denominated ' pro- 
fits,' because the fund so arising is just the free balance on their books after 
fulfilling- or providing for all their obligations ; but in the case of a Mutual 
Society, they are not, properly speaking, profits at all, but surplus capital, 
being proportional advances by the members more than the purposes of the 
Society required from them. In both cases the fund must arise either because 
the mortality assumed in fixing the rate of contribution has proved higher 
than the actual deaths among the members, or the rate of interest obtained has 
been more than was calculated upon. In practice, as may be inferred from 
what has been already said, the hypothesis on which tables for practice are 
generally constructed is considerably within the line of actual probability in 
both these respects. Profits therefore arise because the mortality is not so 
great, and the per centage on investments is greater than was assumed in fixing 
the rates of contribution. If mortality could be measured and predicted with 
as much certainty (as to any thousand individuals for example) as the setting 
of so many suns, and if interest could be meted and recorded in its flowing 
with accuracy as absolute as that which registers the progress of its concur- 
rent stream of time, and were Assurance business done upon net calculations, 
thence deducted, no profits would ever arise, the contributions being fixed at 
the precise sums necessary to meet the relative risks. Every separate as- 
surer would, from the first, pay exactly what was just and needful, and no 
more. The scheme of business would work out its results like Babbage's 
famous machine, and thus all the contest and confusion which have attended 
' distribution of profits,' and ' declaration of bonuses,' in so many Associations 
would have been avoided. Every member would receive just what he was 
entitled to and no more — there being no occasion or temptation, or even pos- 
sibility, in a Society so constituted and worked, for one member getting more 
than he ought, because it would be visibly taken from another, who would in 
consequence receive less." 

Such, however, is not the case, and the writer tells us why. 
We have, he says, to deal in the matter not wholly with mathe- 
matical elements. Mortality may have its general laws ascer- 
tained, but can never be accurately predicted, in its special opera- 
tions, within the limits of a comparatively small body of as- 
surers. Interest may be assumed, on an average, based on the 
experience of the past, but can never be assigned, with arithme- 
tical precision, in tables constructed as a guide for future opera- 
tions. It is absolutely necessary, therefore, that both the rate of 
mortality and the rate of interest shall be assumed. The charges 
of management, and the chances of loss, have also to be taken 
into account upon a probable estimate. The business of Life 
Assurance must, therefore, in all cases, be conducted upon an 
hypothesis. Common sense, and ordinary prudence, at once die- 



312 ON THE DIVISION OF SURPLUS. 

tate that the hypothesis shall be a safe one, and such as to cover 
all the fluctuations and uncertainties arising from the several 
elements of mortality, interest, expense, and loss, which enter into 
and affect the actual business result. He adds : — 

" Premiums for assurance are, therefore, charged, and prices for annuities 
are taken in all cases somewhat higher, and, in some cases, considerably higher, 
than the net sums required in the first calculation. In consequence of this excess 
of charge, a surplus fund arises, which is called profit." 

The writer then anticipates, to some extent, our remarks upon 
the division of surplus; but, as his views are impartial, and his 
manner instructive, we prefer to complete the quotation here : — 

" If this account of the origin and nature of profits be carefully kept in 
view, it should serve to correct several crude and false notions which are apt 
to prevail on the subject. It shows at once that the surplus fund has properly 
been contributed by all the members, in proportion to the amount of their pay- 
ments, and therefore ought, as far as practicable, to be divided among all in a 
like proportion : that profit is not, and cannot be, the excess of the premiums 
paid over the sum assured ; and that to give the whole of such profit to those 
who have so paid up, is not to equalize life among the contributors, but to 
confer a bounty on long life, and in as far as the surplus fund is concerned, to 
act on a principle the very opposite of that on which Life Assurance is 
founded. 

" If our readers experience any difficulty in understanding or assenting to 
what we are now laying down, we only ask them to exercise a little reflection 
on the subject. What is the special object of Life Assurance? What is that 
for which it, and it alone, provides ? Not the accumulation of savings only 
— that may be secured by depositing in a bank, as well as by paying pre- 
miums to an Assurance Office [?] Manifestly and confessedly that which is 
peculiar to assurance is that it provides against premature death, and is in- 
tended to equalize life among all contributors. In the very nature of the 
case some must pay more than they ever receive back, that others may re- 
ceive back more than they pay. Let the fundamental fact be borne in mind, 
and it will at once be seen that what is called profit does not arise because 
some members pay more than they receive, but because all the members from 
the beginning have contributed on a scale higher than proved to be necessary. 
To talk of the members who die early causing a loss, and to punish them by 
exclusion from all share in the surplus fund, is not only unjust, but absurd. 
The death of one who dies the day after he effects his policy, is no more a loss 
to the Institution, in the true sense of loss as used in an Association for assur- 
ing lives, than that of the man who has paid his premiums for half a century. 
Is it not the very pride and glory of the system that the one case is provided 
for as fully and ungrudgingly as the other ? Even in the case of a party who 
dies after paying only one premium, is it not clear that he would have paid less 
than he actually did if the rates had been fixed with absolute accuracy accord- 
ing to the risk ? Even he, in the single payment he had made, must have sup- 
plied a practical contribution to the surplus fund. Loss does not arise be- 
cause members die early, that having been contemplated from the first, and 
provided for in the calculation. Loss, in the true sense, would arise if the mor- 
tality was greater than was assumed, or if the interest realised was less, or if an 
investment should be lost, or if expenses of management proved excessive. In 
short, loss would appear if the rates were fixed on a scale insufficient to cover 
all contingencies. It follows, on the other hand, that profit arises because the 
rates have been fixed on a scale more than sufficient to cover all contingen- 
cies." 

All the most important points in connection with this part of 
the question are now fully before the reader; who should at once 
be prepared to accompany us to the succeeding chapters. 



CHAPTER II. 

OBJECTS AND MODE OF ASCERTAINING THE SURPLUS 

The objects of periodic valuations, of the property and funds 
of an Assurance Office, are primarily to ascertain its solvency or 
otherwise ; and, secondarily, with a view to the distribution of 
any surplus which may be found to exist, in accordance with the 
constitution of the Company and the conditions of the policy. It 
is in this latter sense that we have chiefly to consider the subject. 

The reason why such valuations are necessary, as distinguished 
from their objects, arise out of the peculiar nature of assurance 
contracts, and the lengthened period over which they generally 
extend. Dr. Farr has indeed told us that " The commercial 
balance-sheet, in the most correct form, fails to present a correct 
view of the condition of a Life Office transacting ordinary business ; 
as its liabilities are distant, contingent, and every year vary in 
value" — hence a special mode of treatment has been devised 
which it is our present purpose to explain. The doctrine of Mr. 
Neison is to the same effect: — u No balance-sheet that I am 
capable of comprehending would be available for the purpose of 
showing the actual condition of an Office in the same manner as 
such a thing would be in the case of a banking-house." Mr. 
Finlaison, however, brings us closer to the point, for he declares 
that " From the largest Office in England to the smallest benefit 
club there is no certainty whatever in relying upon any Tables 
without periodic investigations." 

The term " surplus" must here be understood in its general 
sense, and not with reference to the proposition mooted in the 
previous chapter. But a distinction of another kind becomes 
necessary, and that is between " surplus" and " accumulated fund" 
— the surplus being understood to be only such a portion of the 
accumulated fund as exists over and above the actual requirements 
of the Office to meet its engagements. In fact, the term must be 
be understood in its strict sense, of a remainder over and above 
actual requirements. If any method could be devised for sepa- 
rately testing the several sources of profits enumerated in the pre- 
vious chapter, the finance of Life Assurance might be cleared of a 
great deal of mystery. According to the present method, the 
proceeds from all sources find their way into the general funds of 
the Company, from which they have to be separated, in the aggre- 
gate, by laborious actuarial investigation — their individual, or 
their relative values never being really known — except, perhaps, 
in the single case of interest on investments. 

To return to the comparison between mercantile and assurance 
balance-sheets. A merchant or a tradesman, by means of stock- 



314 THE OBJECTS OF A BALANCE-SHEET. 

taking, and an annual or more frequent audit of his books may, 
by simple process, arrive at a comparatively correct estimate of 
his profits or loss over any given period ; and every prudent man 
will do so. The items in a trading balance-sheet comprise, on the 
one side, the market value of the stock in hand, book, and other 
simple contract debts, with cash at bankers or otherwise invested. 
On the other side are his liabilities for goods purchased or other- 
wise, consisting of unpaid accounts, acceptances running, or over- 
drawn banking account. The commodities dealt in have easily 
ascertainable market values ; with customary periods of credit, or 
discount for cash payment; and generally bearing a customary 
rate of profit on the net cost. These items, contrasted with those 
of an assurance balance-sheet, show at once the facilities of the one 
as against the other. 

The objects of an Assurance balance-sheet, or, more properly 
speaking, a statement of the assets and liabilities of an Assurance 
Office are, as we have seen, almost precisely the same as the 
balance-sheet, or financial statement, of a mercantile firm, and, for 
the sake of future reference, may be here set out more formally : — 

First. — To determine the actual financial condition of the Office 
with regard to its capability of meeting all its present and future 
pecuniary engagements. 

Second.- — That if a surplus be found to exist, to determine what 
portion of it, if any, is fairly available and disposable as realised 
profit. 

In form also great similarity exists. Two or three items on 
either side comprise the account. But how few understand the 
months of hard labor, and the years of hard study, which are 
concentrated in the production of these same items in the case of 
the Assurance Office ! 

Two lines will frequently include all the assets. 1. The various 
securities, investments, cash, and other funds in hand. 2. The 
present value of the future premiums to be received under the life 
policies existing at the date of such valuation. To this is some- 
times added a third, enumerating the value of the Offices, furni- 
ture, and stamps in hand — not to say that some of the modern 
Offices have stated as an asset the sums actually expended in 
founding the Office ! On this point more will be said hereafter. 
The value of Offices, <fcc., may properly be included under the 
head of securities, due allowance being made from time to time 
for depreciation, or for improvement, if any has been made. On 
the other side of the account, as against the assets, have to be 
ranged : 1. The present value of the annuities granted by the 
Office. 2. The present value of the sums assured, and payable on 
the death of members, or on the happening of other events. 3. 
Claims allowed, but still unpaid — the period for payment not 
being arrived : and 4, Any money taken, or loan or deposit, or 
any debts on simple contract standing against the Office. The 
balance being available surplus. Here is the actual balance-sheet 



BALANCE-SHEET OF AN OLD OFFICE. 315 

of an old Office, made out exactly on the plan described: except 
that it has not so many items on either side the account : 

ASSETS. 

Gross amount of securities, money in Bank, and other funds £270,496 1 6 
Present value of the future annual contributions from members 484,448 14 6 

754,944 16 

LIABILITIES. 

Value of annuities granted by the Society £41,389 5 6 

Present value of sums assured to members 606,959 5 7 

Claims allowed, and still unpaid , 10,449 13 6 

658,798 4 7 

Surplus fund of available money £96,146 11 5 

Now, it is these " present values" which constitute the essential 
difference between assurance and mercantile balance-sheets. The 
questions of the probable duration of life, as shown by the mor- 
tality tables, and the probable rate of interest as determined by 
the past experience of Offices generally, are here brought to bear 
in full force : and the slightest mistake in either of these parti- 
culars may prove fatal to an office. Mr. Morgan, in one of his 
addresses, gave the members of the Equitable an insight into the 
process by which present values are derived. "To obtain the 
value of each policy in this Society, as it was originally granted," 
he says, " together with the whole of the several additions which 
have been made to it, three separate operations have become 
necessary; 1st. To ascertain the present value of the reversion of 
the sum originally assured after the extinction of the life. 2ndly. 
To ascertain the present value of the reversion of the additional 
sum after the extinction of the same life : and 3rdly. To ascertain 
the present value of all the annual payments which will probably 
be made hereafter in this policy. The latter value, subtracted 
from the sum of the two former, will give the value of the policy, 
or the money which the Society owes to the person assured, for 
his interest in the same." Then follows an illustration, which we 
tabulate : — 

Thus, £1,000 assured on a life of 32, net premium, £27 18s. 6d., 

at the age of 50 is worth £608 13 6 

Bonus of £500 is worth 304 6 6 

Sum 912 19 6 

Following the process : — 

The present value of an annuity of £27 18s. 6d. for that time 

is 12 2-5th years' purchase 345 19 6 

Leaving the Office value of policy £567 

The above values are drawn from the Northampton Table, 
upon which, "as we have already seen, the rates of the Equitable 
Office were and are based. It may be noted here, as absolutely 



316 THE PEINCIPLE OP VALUATION. 

essential, that all the values employed in any one valuation should 
be drawn from the same mortality table, and that that table 
should be one from which the rates of the Offices are derived. On 
this point, Mr. Samuel Ingall, the Actuary of the Imperial Life 
Office, forcibly impressed the select committee on Assurance Asso- 
ciations, 1853. " Suppose, for instance," he says, " an Office were 
to adopt the premiums deduced from the Northampton Tables at 
3 per cent, interest, and, in making up its accounts, should take 
another table of mortality representing life as of much longer 
duration, it would, in many instances, produce what Actuaries 
term a negative value to the policy : that is to say, it would make 
the value of the future premiums very far exceed the value of the 
reversionary sum which the Office is bound to pay." This point 
will be touched upon again as we proceed. Mr. Samuel Brown 
refers to it as one of the means employed to deceive the members, 
or the public, with regard to the real position of an Office. 

Confining our attention now solely to Assurance balance-sheets, 
we may remark that, in all the main elements, the same principle 
of valuation is employed by all the leading actuaries. In some 
points of details, however, considerable difference of opinion and 
practice prevail. " The simple theoretical way of conducting the 
process," says Professor de Morgan, "is to ascertain the value of 
every policy ; that is, to ascertain how much should be given to 
the holder of each policy to renounce his claim, the Office also 
abandoning the future premiums. When this is done, it is 
obvious the Office is not solvent unless the assets arising from the 
accumulations of former years be sufficient to pay the values of all 
the policies, and thus to buy them all up. Supposing the Office 
able to do this, with a capital remaining larger than would be 
necessary to create a permanent fund for the expenses of manage- 
ment, the surplus of the capital is profit. Otherwise, calculate 
the present value of all premiums due to the Office, and also the 
present value of all claims to which it is liable. To the former add 
the sum total of the assets of the Office, and to the latter add the 
present value of a perpetuity equal to the expenses of management?'' 
This last point opens up a question with which we shall have to 
deal more at length presently. 

Another writer points out that the true method of determining 
the actually existing surplus " must have some connection with that 
which would be followed if the Company wished to break up, 
dividing its assets fairly among the assured." And a third fully 
confirms the views we have already expressed: — 

" The first question in any investigation with a view to a division, is the 
ascertainment of the amount of profit at any given period. This is a matter 
requiring very careful treatment. A mercantile firm, however extensive and 
varied may be their property and affairs, or a bank, however speculative may 
be a portion of its investments, proceed to a valuation of their assets upon 
rules and principles which ordinary intelligence and prudence suggest, and 
any considerable mistake will at once become apparent to those concerned ; 
but a Life Assurance Society, from the peculiar natureboth of its property and 



THE GROUPING OF RISKS IN VALUATION. 317 

obligations, might readily fall into errors, which, while they were of a very 
serious kind, might not be even suspected to exist for a long series of years. On 
the one side of the balance-sheet stand, as the property of the Society, its real- 
ized funds and investments, with the present value of all the premiums due 
by the members ; on the other side as debt stands the present value of all 
the sums assured." 

It certainly is not our intention to enter upon or discuss the 
purely mechanical details of conducting a valuation. Both Mr. 
Morgan and Professor de Morgan have already shown the process 
of valuing policies singly; and this is the process, although an 
exceedingly laborious one, most generally adopted in valuations 
for division of surplus. Except where these separate values are 
to be used in the distribution or appropriation of the surplus, we 
are inclined to think that this labor is very unprofitably bestowed. 
We believe that all the policies may be arranged into groups clas- 
sified according to age, or if desired according to age and dura- 
tion of membership ; and that the results so obtained would be 
far less liable to errors than those obtained by the separate valua- 
tion process. It is not unfrequent with the more carefully con- 
ducted Offices to find both these methods adopted ; and as the 
differences are generally almost imperceptible the verdict may 
fairly be claimed for the process involving the least trouble. 

We are glad to find ourselves not unsupported in this view. 
An able writer on the subject of Bonuses in the Assurance Mag. 
(Vol. I. p. 23, part 2), speaking of the "excessive labor attendant 
upon a valuation of each risk separately," denies the correspond- 
ing advantages, and adds : — 

" On the contrary, a very great disadvantage arises from the increased 
liability to error, which such a proceeding necessarily involves. . . . We 
believe we are quite within the mark in saying that the results would be 
identical even when the number of Assurances in each class does not exceed 
six or eight. If the number (he points out in fairness) in many of the classes 
be less than these, there is certainly nothing to be gained by a classification, 
but otherwise it is undoubtedly the preferable alternative." 

Returning to the general question, it is easily apparent that 
any material error in these actuarial estimates might prove fatal 
to an office, and ruinous to its members. Suppose such an error 
to be made as indicated the existence of a considerable surplus, 
when the /actf might be that there was a very small surplus or 
none at all, and the Office on the strength of such valuation pro- 
ceeded to a division of its imaginary surplus, the dilemma which 
would ensue can, as the newspaper writers are wont to express 
it, be better imagined than described : although at least one such 
case is on record. Assuming, however, that everything is cor- 
rectly carried out, the general results of a valuation are not diffi- 
cult to understand. In the case of a Society having available 
assets to the extent of half a million, the premiums (after pro- 
vision for expenses) to be received on the existing assurances 
being valued at another half million, while the claims under the po- 
licies amounted, by valuation to only £750,000, it is clear that such 



318 AGENTS SHOULD UNDERSTAND THE SUBJECT. 

an Office would be in a position to pay £133^ for every £100 as- 
sured ; while if the results presented the least reverse the Offices 
could only afford to pay £15 for each £100 policy held. If there- 
fore every Office was bound to make periodic returns, based upon 
valuations by competent persons, the public would possess a 
guarantee of security which no mere cash account can furnish. 

In the valuation or balance sheet, given at page 315, the sur- 
plus shown in favor of the Society is very considerable, and pro- 
viding that the net, and not the gross premiums only, are brought 
under valuation, (which we may fairly assume to be the case in 
question) such as no Office could be expected to show which had 
not existed for many years under sound and economic manage- 
ment. It is very different from the valuations presented by 
many Offices. If the surplus had been far less, the Office might 
still have been in a sound position. Indeed, if the two sides of 
the account had exactly balanced, leaving no surplus of assets at 
all, upon the supposition of the net premiums only being valued, 
the Office might still be pronounced solvent, although under such 
circumstances it could not be pronounced as nourishing. 

Many other important considerations attach to this portion of 
our subject; but as their discussion at this point might tend 
rather to confuse than instruct, we have dealt with them in a 
separate chapter, under the head of " Insurance Finance," in the 
close of this division ; and we shall now therefore proceed with 
the points more immediately connected with the distribution of 
the surplus. This may be best done in a separate chapter. 

If any apology should be considered necessary, on account of 
our entering more fully into the Bonus question than might be 
expected in a popular work, we find it in the fact that most pre- 
vious writers have, as it appears to us, passed over that portion 
of the subject more lightly than its importance would seem to 
justify. With the exception of Mr. Sang's Essays on Life Assur- 
ance, and one or two papers in the first volume of the Assurance 
Magazine, the subject does not appear to have been handled in 
a connected form. Scattered observations are found throughout 
the works of the several writers quoted in these chapters, but few 
general readers have either time, inclination, or opportunity for 
consulting such a number of works on one particular point. Our 
aim is therefore to place the entire question before the reader in 
a comprehensive form. In these days, when the public talk 
learnedly on investments, and have a keen eye to Institutions 
that " pay and flourish," agents must not be behind hand on the 
Bonus question, if they mean to do well for their Offices, or for 
themselves. 



CHAPTER m. 

PERIODS FOR INVESTIGATION AND DISTRIBUTION OF SURPLUS: 
AND PROPORTIONS DISTRIBUTED. 

Haying now indicated the sources of profit, together with the 
objects and modes of correctly ascertaining them, we may pro- 
ceed to consider their appropriation. This, indeed, involves a 
double consideration : first, the periods of dividing them, and 
next, the methods for doing so. We here proceed to consider the 
former. 

We have already, in these pages, entered upon many points in 
practice, where great diversity of opinion prevails ; and where- 
in consequence, their treatment, having due regard to impartial- 
ity, has been somewhat perplexing. But have we approached 
any point presenting greater difficulties, in this respect, than the 
present ? If, indeed, we had simply to expound our own views, 
without regard for those of others, we might make light work of 
our task. But would this be fulfilling the purpose of a Hand 
Book ? We think not. The plan we laid down in the com- 
mencement of this work was not to expound and enforce learned 
views of our own — there are already more books of this kind 
than find readers, for no subject has been more, or more ably, 
written upon than Life Assurance — but to present our readers 
with a correct and impartial summary of the views and opinions 
of our great English writers and authorities — past and present — 
on all the important points in connection with the theory and 
practice of Life Assurance. How far we have succeeded it is for 
our readers, and not for ourselves, to judge. If we have sacrificed 
originality, we have taken the higher aim of utility — and as utili- 
tarianism is a charge peculiarly laid to the present age, we must 
with patience await our reward. 

Will our readers as patiently overlook this digression ? We 
are to come back to the diversity of opinion which exists on 
points of assurance practice, more particularly on that now before 
us. An instance is at hand. When the Law Life Assurance So- 
ciety was about to be established, its promoters were undecided 
as to the plan they should lay down for the distribution of pro- 
fits, if any should chance to be made. Knowing the point to be 
an important one, in connection with the future prosperity of the 
Office, they consulted with two of the leading actuaries of that 
period, viz., the late Mr. William Morgan, of the Equitable, and 
Mr. Joshua Milne, the actuary of the Sun Office, better known in 
these pages as the compiler of the Carlisle Table of Mortality, 
and the author of a learned treatise on annuities — also with three 
other gentlemen, who were candidates for the actuaryship of the 



320 WHO SHALL DECIDE WHEN DOCTORS DIFFER? 

proposed Office. These five gentlemen unanimously agreed in 
the opinion, that neither the mode originally proposed to be 
adopted in the Law Company, nor that adopted for so many 
years in the Equitable Society, was the correct mode ; but in re- 
ply to the following queries, viz., what is the correct mode of 
distributing profits ? — whether the correct mode be the practical 
mode? — and finally, what would be the most expedient mode for 
the " Law " Company to adopt ? — they all differed in opinion ! 
May the question, so often applied to doctors, be applied to actu- 
aries ? If so let us ask, who shall decide ? Shall we boldly say 
that we hope to put the bonus question in such a light as to ena- 
ble our readers to decide for themselves ! 

But we must first dispose of, or agree to, the periods of divi- 
sion. Many years since, Mr. Babbage pointed out, that " it may 
happen that two Offices whose terms are in general equally eligi- 
ble, may present some difference from the nearness or remoteness 
of the time at which their profits are divided," and what was true 
then is generally so now. 

Glancing at the practice of the Offices, we §nd the periods of 
division ranging from ten years down to one. The Equitable 
still adheres to its decimal divisions — but stands alone in its 
glory. Most of the old English Offices (those included in our 
second period, p. 65), divide every seven years. There is one 
Office which divides every six years. A very large proportion 
divide every five years. Next in frequency comes the three 
years' term. A good many Offices adopt annual valuations. The 
two and four years' periods have no votaries. 

Turning from the practice to the theory, we find Mr. Babbage 
remarking, " The system of a septennial division of profits, which 
is the one most generally adopted, is preferable to that of the 
Equitable Society, but is still inferior to that of the period of five 
years, whilst an annual division distributes the profits with more 
regularity and justice than any other. In such a system the 
nominal sums may not be so large, but the real advantage to the 
assured is more universally distributed. It would, however, be 
desirable to render these annual divisions more uniform in 
amount, by determining them from the average of a certain num- 
ber of the preceding years : the first of these annual divisions, 
therefore, should not commence until after as many years have 
elapsed as the average to be deduced from." 

Professor de Morgan says, "In septennial divisions, one of 
two things always happens : either the profits are rnade contin- 
gent upon a party surviving one or two periods of division, which 
creates great inequalities between the lot of different persons (the 
very thing an Assurance Office was intended to avoid) ; or it de- 
clares beforehand what the profits shall be during periods of seven 
years." He adds, " The valuations should, if possible, be made 
yearly. No check which can be devised is so likely to be useful 
as yearly valuation ; and it is absolutely necessary tp any system 



THE PROSPECTIVE BONUS SYSTEM. 321 

which gives the real amount of their premiums to the assured." 
In another place, however, we observe some slight modifications of 
these views, for he there says, " The process is exceedingly labo- 
rious, and, in all probability, where yearly valuations are made, 
the expense of making the calculation would be greater than the 
loss prevented by taking the more simple, but less accurate 
method" 

Dr. Farr also declares himself in favor of annual investigations. 
" The property, in every form of investment, including consols, 
mortgages, money, real property, and securities of every kind, 
should be valued every year ;" adding, " that much of the arith- 
metical labor which is now expended on valuations may be 
diminished ;" a result certainly " most devoutly to be wished," if 
annual valuations were to become the established order of things. 

Now the plea for annual valuations on the score of doing 
greater justice to participating policy-holders than those made 
at more remote periods, has become considerably weakened by 
the introduction of the "prospective bonus" system. We readily 
admit that it was formerly a matter of considerable injustice to 
those who had paid premiums for nine years out of ten, or six 
years out of seven, or even four years out of five, but chanced to 
die a few months, weeks, or days, before the allotted time for a 
distribution, to be debarred from all participation therein. But 
the " prospective bonus plan" almost completely remedies this, 
and its adoption is becoming very general. Under this system, 
at each investigation, a certain portion of the surplus is carried 
forward for distribution to policies which may become claims be- 
fore the next period of investigation : the method of distribution 
bearing relation to the number of premiums paid since the pre- 
vious bonus division. 

The amount of the prospective bonus is mostly regulated by 
the bonus capabilities of the Office at the investigation from 
which it dates. Thus, assume an Office which divides its surplus 
every fifth year, and that the bonus allocation has averaged, at 
any given period of division, \\ per cent, per annum on the sums 
assured. The deaths which will happen during the next five 
years out of the existing members can be pretty well defined 
(and it is not usual to give prospective bonuses to persons who 
enter between the periods of investigation) :* a portion of the 
surplus at each investigation is therefore set apart for additions 
to such prospective claims (hence the term " prospective bonus") ; 
and, as the deaths occur, this is distributed in proportion to the 
number of annual premiums paid since the period of division. 
The prospective bonus is generally calculated at a slightly lower 
rate than that of the last investigation. Returning to the case 

* Dissatisfaction is sometimes expressed at this regulation. The reason of it is seen to be 
a practical one : as the number of new members who may join between the periods of inves. 
tigation cannot be calculated, the number of deaths that would ensue from them cannot be 
defined : hence no bonus provision can be made for them. If they survive to the next in- 
vestigation after joining in most Offices, they then receive their full share of tbe surplus and 
all prospective advantages. 



322 PEKIODS FOR DIVISION OP SURPLUS. 

assumed, of a 1} per cent, bonus, the prospective bonus would 
probably be at the rate of 1^ per cent. So that a person assured 
for £1,000 would, if he died one year after the investigation, be 
entitled to £12 105., in addition to all previous bonus additions ; 
if he had paid two annual premiums to £25, and so on for every 
additional year up to the period of the next investigation. If he 
survive this, then his prospective bonuses become, so to speak, 
exchanged for his full right of participation, and he commences a 
new series, subject to the rate of prospective bonus for the time 
being fixed. 

We rank the system of prospective bonuses as amongst the 
real improvements which have taken place in the practice of Life 
Assurance ; of course, however, they do not apply to Offices mak- 
ing annual valuations, as their real effect is to remedy the neces- 
sity for this step. 

We think under such a system as we have just described, 
coupled with sound management in other respects, investigations 
at periods of five years are sufficiently frequent for all practical 
purposes. In this view we are strengthened by the fact, that it 
is far more generally adopted by practical Actuaries than either 
more remote or more frequent periods. Out of the Offices now 
existing, about two-thirds of them divide quinquennially : and 
the practice would not be persevered in by such men if found in 
the smallest respect disadvantageous. 

On an attempt being made some few years since by some of 
the members of the National Provident Office for more frequent 
distributions of the surplus, Mr. Charles Ansell, the Actuary of 
the Society — than whom few have had more experience on points 
of practice — urged the following reasons against the proposed 
step, and, by deduction, against frequent periods of division 
generally. 

" There is another element necessarily introduced into the affairs of an 
Assurance fund, and that is that you assure to some assurers £50 and to some 
£5,000. That is an element which gentlemen not much accustomed to deal 
with the inside of Life Offices very frequently lose sight of. If it could be 
predetermined what would be the rate of mortality, and what would be the 
rate of interest, you still have another element that not only may throw you 
out of your average, but actually does — and that very materially indeed, 
everywhere, and more particularly in your own institution." 

And as the Institution in question is far too firmly established 
to be prejudicially affected by the results of its experience being 
known, we may quote the following instances which Mr. Ansell 
then quoted in support of his views : — 

" I find in the year 1847 the per centage of the claims upon the premiums 
of the year was 23 and a fraction per cent. ; but in 1849, which from some 
cause or other was an unfavorable year, it suddenly jumped up from 25 to 38 
per cent, upon the premiums of the year. The Chairman reminds me that 
that was the cholera year, and these things are likely to recur in that or some 
other form. In 1850, it again fell from 38 to 29 ; in 1852, it fell again to 31 
per cent ; in 1853, it rose suddenly to 51 per cent. And it is to avoid these 



DIVERSITY OF THE MODES OP DIVISION. 323 

jumps and inequalities that it seems to me undesirable that you should disturb 
the present arrangement (of quinquennial divisions) which appears to have 
worked with moderate evenness." 

In conclusion, he cites the results of the two quinquennial divi- 
sions. In that ending in 1847, the claims had averaged 27 per 
cent, of premiums, and at that ending in 1852, 32 per cent., the 
increase being no greater than might fairly be expected. He 
pointed out, as we have already done, that the only persons who 
suffered by distant periods of division were those who died in the 
intervals between them : but this we have shown may be chiefly 
remedied by the system of prospective bonuses.* 

PROPORTIONS OP PROFITS DIVIDED. 

"We have hitherto confined ourselves rather to the purposes, 
modes, and times of investigation than to actual proportion of 
profits divided. It is now time to deal with this latter point. 
Every one knows that, in a Mixed Office, a portion of the profits 
only is promised to the assured, while in a Mutual Office the 
whole is supposed to be set apart for this purpose. But every 
one may not know that it frequently happens, in a Mutual Society, 
that such a share of profits is set aside or carried forward for 
the purposes of a reserve fund, that the actual sum divided 
amongst the members is below that which a Mixed Office, 
by reason of its guaranteed capital, can afford to divide. It 
would, indeed, be an endless task to attempt here minutely 
to trace the different proportions awarded by the different 
Offices : they range from two-thirds of ninth-tenths, as in the 
case of the London Assurance Corporation, down to fifty per 
cent., as is the case with the London and Provincial Provident, or 
from seventeen-twentieths, as in the case of the London and Con- 
tinental, to twenty twenty-first parts, as with the (old) Provi- 
dent! Every grade between such limits exists, and the whole 
are set forth in a carefully prepared table at the close of the 
next chapter. By far the most frequently adopted proportion is 
that of four-fifths to the assured, and the remaining fifth to the 
shareholders. 

Mr. Babbage long since noted some of the points we have 
referred to. He says, " the share which some Offices contract to 
return, although nominally one-half or two-thirds, is in truth, 
from the manner of apportioning it, perhaps not one quarter part 
of the profits ! And hence the public form an erroneous opinion 
from the proportions offered by the different Offices." And even 
as to Mutual Offices, if the whole profits were really divided, the 
different classes of members are by no means sure of getting their 
propor proportions ; which circumstance has led Professor de 
Morgan to remark that " the members of a Mutual Insurance 
Office are not properly represented in their list of Directors, 

* Tide Post Magazine, vol. 16, p. 42-3. 



324 RESERVED PORTION OF SURPLUS. 

unless the individuals composing it are of very different ages." 
This objection however can only apply to Offices where the pro- 
portions are not fixed under the Deed of Settlement or Act of 
Parliament. 

On the general question of the inequality of the proportions 
divided, Mr. Jellicoe has remarked, " We have Societies whose 
charges are equal, returning sometimes fifty, sometimes eighty 
per cent, of the surplus ; and amongst such as vary in their rates, 
the proportion returned to the contributors is not unfrequently in 
the inverse ratio of the average amount of them." Mr. ISTeison 
offered to the Select Committee on Assurance Associations a solu- 
tion of the origin of these differences and discrepancies, which 
appears not only reasonable but worthy of careful consideration 
by the promoters of Assurance offices. 

" Often," he says, " the deeds are drawn by mere lawyers — men who are not 
technically acquainted with the modes of calculation necessary in the determina- 
tion and distribution of the profits of an Assurance Company. One-third of the 
profits in one Company may be more than two-thirds of the profits in another 
Company ; for by the terms and conditions of the deeds of settlement of some 
Offices it is provided that a given proportion of the profits arising- among the 
participating policies only shall be appropriated as a bonus to those policy- 
holders ; while according to other deeds of settlement the same or some other 
proportion of the gross profits, from all sources of the Office business, is 
declared to be applicable to the profit policy-holders ; therefore although 
apparently from the prospectuses of two different Companies the same ratio of 
profits is awarded to the assured, there may still, in fact, be a very wide differ- 
ence in the actual amount so appropriated, in consequence of the varying 
restrictions in their deeds of settlement, and this is seldom, if ever, clearly 
understood by the public. In both instances the policy-holders may nominally 
get, we will say, three-fourths of the profits ; but in one they may get that 
share of the gross profits, and in the other the participating class of policy- 
holders may get only that share of profits of their own policy and of the 
residue." 

It was a rule with the managers of the Equitable — and certainly a 
very good one — never to divide the whole of the surplus : in fact, 
generally a very large portion was left untouched, and therefore 
kept on accumulating. In 1776, when the first investigation took 
place, the surplus of £25,000 was only reduced to £14,000. In 
1786, when the next investigation took place, the surplus of 
£164,000 was reduced only to' £110,000. In 1793, when the sur- 
plus, by an approximated computation, appeared to be £302,000, 
it was reduced to £203,000; and in 1800 at the period of the 
fourth investigation, the surplus of £480,000 was reduced to 
£225,000. " In all these instances, therefore," says Mr. Morgan, 
" the moderation of the general Court suffered a very large pro- 
portion of the surplus to remain a fund, for the benefit of those 
that should succeed them." Most other Offices have adopted a 
similar course. In some instances, as much as one-third of the 
surplus is carried forward, but more frequently one-fourth or one- 
fifth, which are fair proportions, for the purposes of security, 
and to provide for the fluctuations which may arise in later 



RESERVED PORTION OF SURPLUS. 325 

periods, either in the mortality experienced, or the rate of in- 
terest realised. In reports upon bonus investigations, the amount 
carried forward is generally stated. 

A writer in the Assurance Magazine (vol. 1, p. 27, part 2), 
evidently not unfamiliar with the subject, says : — 

" The surplus, then, being satisfactorily ascertained, it appears only consist- 
ent with justice and propriety that it or its value, as exactly as possible, 
should be returned to the contributors. The practice of reserving a part of is 
seems to be necessary, for there is not only the excess included in the future 
premiums, but very generally a subscribed capital to fall back upon, beside, 
the fund reserved for the liability. The surplus is the property of the con- 
tributors of that day, and the complication of interests which must arise from 
the keeping back any part of it is carefully to be avoided. In short, the main 
object of the periodical adjustments made by Life Assurance Companies is the 
return of what has been overpaid to those who have contributed to the excess." 

There are few persons, however, who would not prefer to see 
a respectable reserve fund accumulated, even at the expense of 
their own apparent present advantage. 

Some of these points will be followed up in the next chapter. 



CHAPTER IV. 

THE MODE OP DISTRIBUTING THE SURPLUS. 

We have, in the previous chapter, to some extent, prepared 
our readers for the diversity of practice and opinions he may 
expect to meet with in the consideration of this part of the 
subject. 

A writer, from whom we have before quoted, appears to have 
prepared a special introduction for our present chapter. " When 
the amount of profit or surplus fund has, at the assigned period, 
been ascertained, the next question in order, and not inferior in 
importance is, how is that fund to be divided ? The question of 
amount is one of scientific calculation — the question of distribution 
is one of equity. As might be supposed, the latter is emphati- 
cally the questio vexata among assurers and assured, upon which 
every Office professes to hold and apply the only true principle 
of division, and upon tohich it is perhaps impossible in practice to 
realize perfectly the full results of the most unexceptionable theory" 

He points out that, although absolute and exact equity may 
be unattainable, the principle of division should be sound, and 
such as to afford, in its application, the nearest approximation to 
even-handed justice ; and continues : — 

" By special compact, the whole of the parties interested may be bound to 
a particular method of division as, for instance, by the deed of constitution, 
or the bye-law of the Association, it may be provided, that the first 5,000 
policies shall alone participate in the surplus fund [as is the case in the Equi- 
table], or that none shall share in such surplus until they have paid premiums 
equivalent, with interest, to the sum assured [as in examples which will fol- 
low]. In such cases, it may be admitted, that as all parties know the rule 
before they join the body so constituted, none of the members can fairly com- 
plain when they find the laws consistently carried out. Others, however, are 
entitled to maintain, in the name of sound principle, that by so agreeing to con- 
duct business, the effect is to divide, among a favored class what was contributed 
proportionally by all, and that, to the extent of the surplus, the principle ap- 
plied is not that of equalizing life, and providing against premature death — 
the great and proper object of life assurance — but of conferring a bonus and 
bounty upon long life, which is the gambling principle of the Tontine"* 

Before proceeding to details, there are several considerations 
of a general character which require to be noted. Mr. Sang has 
forcibly pointed out what indeed our readers must, before this, 
be thoroughly familiar with, viz., that what are called profits are 
simply (in some form or another) the over-payments of the mem- 
bers. " Could the mortality amongst those members be accurate- 
ly predicted, and the profits of investment foretold, the premiums 
could be computed so as just to meet the engagements, in which 

* Vide North British Review. 



SURPLUS DOES NOT ALWAYS MEAN PROFITS. 327 

case, while there never would be any surplus fund, each member 
would receive exactly the benefit to which he is entitled ; and, 
De it observed," he continues, " no member of such an Association 
can receive more than his share of benefit, if not at the expense 
of some other member who receives less. For security somewhat 
more than the net value is charged as premium for assurance, 
and the excess of the actual over the net premium goes to form 
the profit fund ; this excess, in fact, constitutes the profit in a 
policy." 

Following out his course of reasoning strictly, he arrives at a 
conclusion in which he is not unsupported, viz., that 

" The accumulated capital of a (Mutual) Assurance Society then belongs 
partly to the former members and their representatives, and partly to the 
present members. So tha^ if it be wished fairly to distribute the unneces- 
sarily large fund, the two portions of which it consists ought to be separated 
from each other, to be paid over to the heirs of the late members, and the 
other given to, or placed to account of, the present members. This is required 
in strict equity. The accumulated fund is, in fact, a guarantee, and when this 
is no longer needed, it should just be returned to those who have contributed 
towards its formation." But, he adds, " on the other side, it can be said, that 
the early insurers were willing, in the then state of the science, to pay a 
larger price, such price being in truth due to the uncertainty, and all that we 
do by dividing the surplus fund raised by them is to prevent it from being 
handed over to those who are to come after us, and who certainly have no 
more title to it than we have After the first division of pro- 
fit, this case does not occur again to any extent, being prevented by the perio- 
dical investigation and declaration of bonus."* 

Dr. Farr says, on the same subject : — 

" The surplus in a Mutual Society arises in a way which, I think, does not 
entitle them to be called profits. There is a charge upon the premium : say 
£10 a year, on the premium which would assure a given sum : instead of £10, 
£13 is charged ; the £3 is paid as long as the man continues in connection 
with the Office ; so that a person who assures his life in a Mutual Office is 
really a shareholder, who engages to pay what is stipulated as the annual call 
so long as he remains connected with the Office, and the Office engages to re- 
turn that capital at certain stated intervals, the longest of which is the man's 
death. But that is not fairly to be considered profit ; the profit, I conceive, 
arises from the interest realised exceeding, we will say, three per cent., at 
which the tables were calculated : Offices frequently make four per cent., and 
all above three per cent, is profit 1 he excess over the net pre- 
miums, or the charge upon the premium, is really a contribution of the policy- 
holder to the funds of the Society." 

The latter observations confirm pretty fully the distinction we 
have already set up ; a distinction not without its importance in 
reference to the point now under consideration. In almost every 
Society some injustice is done to the younger members, by with- 
holding a portion of the surplus they have contributed, and ap- 
plying it to the formation of a contingent or surplus fund. This 
applies with more force (as we believe we have already explained) 
to Mutual than to Mixed Offices. To purely Proprietary Offices 

* Sang's Essays on Life Assurance. 



328 WHAT METHOD OF DISTRIBUTION IS MOST EQUITABLE ? 

it does not apply at all. It appears almost a necessary condition 
in assuring in a young Office that the persons so assuring should 
not only participate in, but contribute to, the success of the Of- 
fice : and, as this risk is incurred generally, with the view of se- 
curing some corresponding advantages out of the " new features " 
of the particular Office selected, the persons assuring, provided 
the facts and prospects have not been misrepresented, have no 
cause of complaint. 

In almost every Society — certainly in every well conducted 
Society — whether young or old, some portion of the ascertained 
surplus is carried forward either to a contingent fund, or as a 
temporary reserve until the next period of investigation. But 
the hardship of this course, if it may be so termed, chiefly dates 
from the starting point. If, at the second division, a sum is car- 
ried forward, the sum brought forward from the first division in 
some, and perhaps a considerable degree, compensates for it ; and 
so at each subsequent division. So patent, indeed, is the fact, 
that some portion of the surplus of an Office will almost invari- 
ably belong to the representatives of deceased members, that one 
of the existing Life Offices has made its chief feature the division, 
under certain conditions, of a portion of its profits among such 
representatives. 

We must, however, proceed to consider the subject in a more 
general light. 

Now, if the conclusions with respect to the origin and owner- 
ship of the surplus be sound — and we do not see how they can be 
disputed — it follows that in a Mutual Office, at least, it should he 
distributed according to the strict principles of equity — that is, in 
proportion as each member may have contributed to its accumula- 
tion. This takes us back first to the question of " loading " the 
premiums : and assuming this to be equal at all ages, having a 
correct Mortality Table for a basis, the point at once turns and 
rests simply upon the problem — What method of distribution 
may be considered the most equitable ? 

With a view to arrive at any conclusion on this point we must 
now proceed to some explanation of the methods of distribution 
at present practised. These may be arranged as follows : — 

1. By a per centage on the premiums paid. 

2. By a per centage on the sums assured. 

3. By a per centage on sums assured, and all previous bonus additions thereto, 

4. By a fixed periodic addition to the sum assured. 

5. By the Tontine principle. 

To which may be added two other methods proposed by Dr. 
Farr, viz. : — 

6. At an equal rate on the sums in deposit to the account of each assurer. 

7. At an equal rate on the " charge " accumulating, not simply at compound 

interest, but as a life annuity forborne. 



PER CENTAGE ON SUMS ASSURED. 329 

These two last schemes will, we fear, frighten our unprofes- 
sional readers. We will not here dwell upon them further than 
to remark that Dr. Farr gives his opinion in favor of the latter 
method as being the soundest. 

A few examples in detail will be desirable to render the reader 
more familiar with the methods just enumerated. 

I. PER CENTAGE ON PREMIUMS PAID. 

The effect of distributing the surplus by a per centage on the 
premiums paid may be thus exemplified. Assume two persons, 
one aged 20, and the other aged 50, to be assured for £1,000 each 
in the same OflBce, and that the per centage of bonus return 
amounts to 50 per cent, on the premiums paid. In five years 
the person aged 20 would pay £100 in premiums, and the person 
aged 50 would pay about £225. The distribution would give to 
the young life £50, and to the older one £112 10s., added to 
their respective policies. 

This is the method of distribution adopted by the majority of 
the English Offices ; and where the premiums have been loaded 
equally at all ages may be considered exceedingly equitable, al- 
though theoretically not the most exact method. 

II. PER CENTAGE ON SUMS ASSURED. 

Where the distribution is by a per centage on the sums as- 
sured for each year of the currency of the policy, the operation 
is as follows : — Take the case of two persons assured for £1,000 
each ; one entitled (by reason of his earlier membership) to five 
years' participation ; the other to three years only. The rever- 
sionary bonus being at the rate of lj per cent, per annum, the 
one member has an addition of £75 to his policy — the other £45 
only. 

In this case neither the amount of premiums paid, nor the 
ages of the assured, in any way influence the amount of bonus 
addition. So long as the method of distribution is confined to 
reversionary bonuses, this system of dividing the profits will 
not be far from equitable. But if a system of cash distribution 
be adopted, the method becomes exceedingly unequal, not to say 
unjust. 

Thus assume two persons to have been assured for five years 
for the sum of £1,000 each, the one being aged 25, and the other 
50, at the periods of division, and that the cash division gave 7s. 
6d. per cent, per annum on the sum assured, this would give each 
member £18 15s. cash. With this sum the younger member 
could purchase a reversionary bonus of £50, the elder one only 
£33! 

Now where an incorrect mortality Table has been employed, 
such a method of distribution may in part compensate for the 
defects. In this case the errors of the Northampton Table are 



330 PERCENTAGE ON SUMS ASSURED — FIXED PERIODIC ADDITIONS. 

partly remedied. That Table favors the old at the expense of 
the young members. This system of distribution has a tendency 
the very reverse. 

Many of the Offices professedly dividing on this principle intro- 
duce or adopt a modification, which, if the Mortality Table em- 
ployed be a correct one, brings this principle of division nearer 
to the equitable results: it is where the reversionary bonuses 
only, and not the cash bonuses, are equal at all ages. The in- 
equality therefore is adjusted at the onset; and if the rate of 
loading be equal at all ages, the plan becomes, by this modifica- 
tion, an exceedingly equitable one. 

III. PEE CENTAGE ON SUMS ASSURED, AND ADDITIONS. 

This plan only differs from the last in so far that the per cent- 
age of bonus extends not only over the sum assured, but all pre- 
vious additions made thereto. So that, following out the case of 
the £75 addition at the end of the first five years, the sum then 
payable under the policy is £1,075 and upon this sum the next 
bonus will be declared. The rate per annum continuing the 
same (viz. 1-J percent.) the amount at the second declaration will 
be £80 12s. 6d., making the total sum under the policy £1,155 
12s. 6d., and so on progressively. 

This appears to us an equitable method of conferring an ad- 
vantage upon long life ; for while we fully recognise the principle 
that the benefits of Life Assurance are especially directed to 
those who may chance to die early ; and that the fact of living 
should be held to constitute the greatest reward of long life ; yet 
"that the Offices which within endurable limits favor the old 
lives, will in all probability retain a strong hold on the support 
of many, and therefore aid in the extension of the assurance 
principle." 

IV. FIXED PERIODIC ADDITIONS. 

The principle of making a fixed annual addition to the sum as- 
sured irrespective of the actual profits realised by the Office, was 
originated with a view to afford the assured all the benefits of 
Life Assurance without any liability on the score of mutuality 
arising from participation in the profits. 

It is the popular notion, and to some extent the actual fact, 
that participation in profits also extends to, and necessarily in- 
cludes, participation in losses. This was calculated to deter at 
least some persons from assuring. To such the present plan is 
unanswerable. The rate of bonus addition is a matter of special 
contract dating from the commencement of the transaction, and 
in no way dependent upon the success of the Office, unless it 
cease altogether. 

Assuming this fixed addition to be lj per cent., its operation 
would be precisely that stated under the second head — except 
that in this case the per centage would never vary. 



THE TONTINE PRINCIPLE SUMS IN DEPOSIT. 331 



V. THE TONTINE PRINCIPLE. 

The Tontine principle is practised under two forms, each of 
which must be distinctly considered. 

1. The first is that under which no profits are given to policy- 
holders until the premiums they have paid under their policies, 
improved (invested) at the rate of interest assumed in the Tables, 
amount to the principal sum named in the policy. 

When this happy period may arrive will depend partly upon 
the age of the person assured, at the time of taking out the policy, 
and partly upon the rates of premium charged. If these be high, 
of course they will accumulate more rapidly than if they be very 
low. At present there exist only two Offices which adopt this 
method of distribution. 

Those members who die early, that is, before the above-named 
condition be fulfilled, do not participate in any portion of the 
profits : but by way of immediate compensation, the rates of pre- 
mium are fixed upon a very low scale. 

2. The second plan of Tonti?ie bonus is based on what may be 
termed the retrospective principle : that is to say, that at each 
division of surplus the right of participation dates back to the 
period of issuing the policy, and not simply to the last division of 
surplus. 

An illustration is necessary. Assume the rate of bonus addi- 
tion to be at the rate of £1 per cent, per annum on the sum as- 
sured. On a £1,000 participating policy of five years' standing 
the addition would be £50. Sum payable under the policy 
£1,050. At the end of another five years assume a second dis- 
tribution at the same rate per cent, per annum : here the opera- 
tion of the plan is seen. The right of participation dating back 
to the time of taking up the policy, the second bonus addition is 
£100, in addition to the previous £50. At the third division, on 
the same assumption, the addition will be £150, viz., 15 years at 
£1 per cent, per annum, in addition to the £150 previously add- 
ed : making, taking total claim under the policy, £1,300. And 
as the age of the policy advances the effect becomes necessarily 
more striking. The next division at the rate assumed would add 
£200 more to the policy. 

This mode of distributing the surplus originated with the 
Equitable Society; its purpose being to remedy the injustice 
which had been committed upon the members of that Society by 
the unnecessarily high premiums charged during the early period 
of its operations. As the principle has been much discussed, and 
is an important one, we purpose offering a few additional obser- 
vations upon it at the close of the present chapter. 

VI. ON SUMS IN DEPOSIT. 

The suggestion that the surplus should be distributed in rela- 
tion to the sums remaining " in deposit to the account of each 



332 VARIOUS MODES FOR DISTRIBUTING SURPLUS. 

insuree," will hardly be understood by non-professional readers. 
The chapter to follow this is intended to be on the " Finance of 
Life Assurance ;" and it will there be shown that an Office should 
have a certain portion of the premiums received on each policy 
remaining in hand, increasing with each year of the currency of 
the policy — the aggregate of these deposits making up the sum 
of the accumulated funds of the Office, or the sum to which, at 
least, the accumulated funds must amount, if the Office be sound: 
anything left over and above being surplus. 

This plan would, to some extent, approach the Tontine prin- 
ciple ; but as it is not now actually in practice, so far as we are 
aware, we will not pursue it further. 

VII. ON THE " CHARGE" OR " LOADING." 

The system of distributing the surplus in relation to the addi- 
tions made to the " pure" premiums appears to us exceedingly 
equitable ; and if all the surplus arose from this one source it 
would also be theoretically correct. We are not aware that it 
has yet been acted upon, but like all the suggestions of Dr. Farr, 
it deserves careful consideration from those engaged in the prac- 
tice of Life Assurance. 

Professor de Morgan clearly advocates this last method of dis- 
tribution, for he says, (Essay on Probabilities, p. 287,) " having 
ascertained the amount of what each person has paid over and 
above what was necessary for the risk" the most equitable man- 
ner is " to consider such person as entitled to the sum which his 
overplus would purchase at his death, if the bonus be made by 
addition to his policy ; or to a diminution of premium answering 
the annuity on his life which the overplus would buy if the bonus 
be made by diminution of premium ;" and Mr. Jellicoe argues in 
the same direction : — " The true mode of dividing the surplus is 
in proportion to the amount, at the prevailing rate of interest, of 
the payments made by each contributor over and above those re- 
quired for the risk" 

We need, perhaps, hardly point out to the reader that the prin- 
ciple of distributing the surplus of an Insurance Office is of far 
greater moment than the simple consideration of how each parti- 
cular policy-holder will apply, or have applied, the allocation of 
surplus made to himself: although the point is not without 
interest. 

It is customary with most Offices to give their policy-holders 
the option of several methods of applying their ascertained share 
in the surplus, viz., either 

1st. Of adding a sum to the policy to become payable with the 
principal sum named in the policy. This is called the rever- 
sionary bonus plan ; and to this our previous examples have 
been chiefly confined. 
2nd. Of applying the bonus to a reduction of the future premiums. 
This reduction may either be spread over the whole of life 



ALL THESE MODES BEST ON A CASH BASIS. 333 

until the whole premiums be exhausted ; or over a term of 
years dating till the next division. The former plan is 
generally preferred, although the effect is not so immediately 
perceptible. 
3rd. Of receiving the bonus in cash — or, as it is generally termed, 
at its cash value — at the time of declaration. 
To these have been added another plan, namely : 
4th. Of giving a new policy for the amount of the reversionary 
bonuses, free from the payment of premiums ; or, a new 
policy, for such a sum as the cash value of the bonus would 
assure for one year : the future annual premiums to be paid 
by the holder of the policy. This latter plan is of rather a 
fallacious character. 
Now it will simplify the bonus question greatly if we assume 
(and the assumption is pretty well justified by the practice) that 
all bonus additions are, in the first instance, ascertained in cash. 

Let us try and illustrate this point. Assume an Office where 
the valuation has just been completed, and where an actually 
available surplus of £75,000 is shown. This must be in cash to 
be available. Also, further assume (as the most simple for the 
purpose) that the mode of distributing this surplus is to be by an 
annual pel* centage on every £100 assured. It being found that 
the Office has on its books 5,000 policies, averaging £500 each : 
this is divisible into 25,000 distinct sums of £100 each. But the 
term of membership varies : 1,000 of the policies have been five 
years in force, another 1,000 only four years, another but three 
years, the next but two years, and the last thousand but one 
year. Now tabulating these results, we get 75,000 distinct allo- 
cations of surplus, thus : — 

1st. 1,000 policies of £500 each, 5 years existing = 25,000 parts. 

2d. " " 4 " =20,000 " 

3rd. « " 3 " =15,000 " 

4th. " " 2 " =10,000 " 

5th. " " 1 " = 5,000 « 



75,000 



Hence the available surplus of the Office is capable of allotting 
£1 in cash to each £100 assured for every year the assurance has 
been in force. So that the holder of a £1,000 policy, five years 
in force, takes £50 in cash. A holder of a similar policy of four 
years' duration, would take £40 ; of three years' duration, £30 ; 
of two years, £20; of one year, £10; the whole surplus being 
thus exhausted. 

Here then the policy-holders have their bonuses in cash. We 
are not saying that such a large cash bonus is to be expected, or 
advocating the principle of a distribution by a per centage on the 
sums assured. We are simply desirous of showing that the dis- 
tribution of the surplus is by cash allocations in some form — what 



334 ALL THESE MODES REST ON A CASH BASIS. 

that form may be depending either upon pre-arranged conditions, 
or the views of the actuary employed. 

The next step is to take several policy-holders, each entitled to 
the same share in the surplus, but desirous of applying it in dif- 
ferent forms, as may best suit his circumstances. Let the sum to 
be dealt with be £50 in cash in each case ; and let A, B, C, D, 
E, and F, represent the parties; their respective ages being 30. 

A, elects for a reversionary bonus. £50 paid down at the age 
of 30, will purchase a new assurance for £110 payable at death, 
which, added to the £1,000 assured, brings the amount to £1,110. 

B, elects to have his bonus applied to the liquidation or reduc- 
tion of his premiums for the whole period of life. £50 at age 30 
will purchase an immediate life annuity of £3. Hence, instead of 
paying £20* per annum premium on his policy, the amount of 
the annuity will be deducted, and he will pay £17 for the next 
five years : when, if the bonus be at the same rate, the amount 
will secure him a still greater reduction on account of his in- 
creased age. 

C, elects to apply his bonus to a reduction of his premium for 
the next five years only. £50 at age 30 will purchase an annuity 
for five years of £11, reducing his premium during that period by 
that amount. But at the end of that period the premium reverts 
to its original sum, unless the next bonus be applied in like 
manner. 

D, determines upon a cash bonus : he therefore keeps his £50, 
and goes on paying the same premium as he started with. 

Ej elects to take a free policy for the reversionary value of his 
bonus. The amount of such policy may be the same as A's ad- 
dition to his policy ; or if E determines upon a non-participating 
which is issued at lower rates, he may have £120 instead of £110. 
The latter policy, however, would be entitled to bonus additions. 

F, makes a large show with his bonus, by taking out a new 
policy for £2,000, for which his £50 pays the first premium ; but 
the future premiums have to come out of his own pocket if the 
policy be kept in force. 

We shall now be fully understood when we assert, that it is a 
matter of little moment to an Office which of the methods of appli- 
cation the assured may select, although it may be a matter of 
considerable moment to the assured himself, for reasons which will 
be fully entered upon in our chapter on the selection of an Office. 

It must, however, be remembered that all Offices do not give 
the several options just detailed. Some, as the London Life, 
Metropolitan, Hand-in-Hand, Clergy Mutual, National, Grea$ 
Britain, Family Endovmient, Britannia, and one or two others, 
apply their bonuses to reduction of premiums only. Another, the 
Life Association of Scotland, gives the option of cash, or, if in 
health, a new policy. But most of the Offices give either of three 
alternatives, viz. ? addition to sum assured, reduction of premiums, 
or casl|t t 

* About the rate at age 25. 



CASH BONUS V. REVERSIONARY BONUS. 335 

It has been the subject of some discussion amongst writers — 
leaving out the actual advantage, which must be nearly equal to 
the Office — as to which method of applying the bonus is most 
theoretically correct. Mr. Sang argues, that each member hav- 
ing agreed to pay " a certain premium during the currency of his 
policy, or during part of that currency, on condition that he shall 
obtain a certain payment when the policy falls, and shall have a 
share in the profit or loss of the Society, it seems to me," he con- 
tinues, " perfectly clear that the agreement is to last during the 
whole currency of his policy, and that no member is entitled to 
claim his share of the profit until his policy expire. He is not 
entitled to draw out his share of the profit at any intermediate 
time" Another writer speaks of the reversionary bonus plan as 
the safest in the long run, " because any excess in one year will be 
compensated in future years :" whereas, if the cash be distributed, 
this adjustment cannot take place. 

But on the principle of prevention better than cure, Mr. S. 
Ingall would prefer a cash distribution: because, "if the Society 
declare a surplus exceeding the amount of assets, it would be im- 
possible to pay it down in cash." Hence, he says, it would be a 
very " wholesome regulation," that " nothing should be treated 
as profits that are not capable of being paid in cash."* 

On the other hand, we are disposed to believe the public taste 
is leaning towards reduction of premiums. The Offices exclusively 
adopting this plan mostly do a good business ; and we think its 
adoption favorable to the extension of Life Assurance. 

TONTINE BONUSES. 

The retrospective bonus plan, as we have already said, was ori- 
ginally adopted by the Equitable ; and it applied with great 
justice to the early members of that Society, for the simple reason 
that they had been charged rates of premium which turned out 
to be so extravagantly high that they were on three occasions re- 
duced. These reductions, however, would not compensate the 
assured for their outlay in the past, although it would protect 
them in future; but the retrospective bonus system, i.e. the ex- 
tending the bonuses back to the date of the policy, did give the 
assured the justice they were entitled to, and is one of the many 
instances of the honorable manner in which the affairs of this 
Society were conducted. We shall quote Mr. Morgan's words 
in illustration of the course pursued : — 

" When the premiums were first reduced in the year 1776, it was in conse- 
quence of a very careful and minute investigation into the real state of the 
Society, by computing- the value of each policy of assurance and comparing" 
the whole amount of these separate values with the capital of the Society at 
that time. During the five following years, it was found that the number of 
deaths among the members was so much less than the table of observation 
supposed them to be, from which the premiums were computed, that it was 
determined to have recourse to another table, which gave higher probabilities 

* Report of Select Committee, question 1961. 



336 RETROSPECTIVE BONUS PLAN OF THE 

of the duration of human life ; or, in other words, which supposed the decre- 
ments of life to be fewer than the table then in use. When this arduous task 
was accomplished (which required about 20,000 computations), the Society 
adopted the new premiums (in 1782) ; but very properly charged them with 
an addition of 15 per cent., in order to proceed with caution, and to prevent 
any alarm in the public, from too great a reduction in its terms at one and 
the same time. 

" In the year 1786," he continues, " an investigation, similar to what had 
been formed in the year 1776, was carried into execution ; the result of 
which was found to be so favorable to the Society, that the 15 per cent, which 
had been charged upon the premiums in 1782 was taken off, and the terms of 
assurance were reduced to their present state. I need not observe that, at 
these two last periods, compensations were made to the members then existing 
for the higher premiums which they had hitherto paid, compared with those to be 
taken in future by increasing their claims in proportion to the number of 
annual payments which they had previously made"* 

The effect of these retrospective additions on the funds of the 
Society may be seen by a reference to the foot note below. It 
was such as to induce Mr. Morgan, in his address of 3rd Decem- 
ber, 1795, to remark, that if they were continued at the same rate 
as they were commenced they would, in a few years, u amount to 
such a sum as would exhaust not only the surplus stock, but even 
the whole capital of the Society" — and this, notwithstanding the 
fact referred to in the same address, and already quoted, that not 
one-half of the whole-term policies effected during the first 25 
years were continued in force until they became claims : thereby 
showing, in this respect, a very considerable source of profit. 

The grounds which led the Equitable to the adoption of what were 
in effect Tontine bonuses, were exceedingly reasonable and just, but 
the financial reasons against its continuance very early showed 
themselves. A system, however, so calculated to benefit the older 
policy-holders was not likely, in a Mutual Society, to be voluntarily 
discontinued. We have it, indeed, on the authority of Mr. Mor- 
gan, that in some cases under this system, the sums claimed under 
the policies had been increased above one hundred and forty 
per cent. ! Accordingly, notwithstanding the remonstrances and 

* The following particulars regarding the Equitable bonuses may be found useful for fu- 
ture reference. They are taken from Mr. Morgan's address to the Court in 1809. " In 1786, 
by an addition of £1 per cent., together with the addition of 1>£ per cent, in 1781, the sums 
originally assured were increased £22,670 from £977,330 to £990,000t or in the proportion of 
1 to 43. In the year 1793, by an addition of £2 per cent., together with the preceding addi- 
tion in 1791 of £1 per cent., they were increased £112,859, from £2,976,476 to £3,089,335, or in 
the proportion of 1 to 26. In the year 1800, by an addition of £2 per cent., together with an 
addition of £1 per cent, in 1795, they were increased £479,761 from £3,904,685 to £4,384,446, or 
in the proportion of nearly 1 to 8. But in the present year, if £2 10s. be added to them, they 
will be increased, including the former additions, £2,094,643, or in the proportion of more than 
1 to 4 ; that is, instead of £8,024,000, originally assured, the whole sum, including all the addi- 
tions, will amount to £10,118,571, and the present value of the claims on those original 
sums will be increased from £4,557,757 to £5,845,000 ; or, in other words, over and above 
the sums already paid in addition since 1781, amounting to £222,000 and upwards, the Society 
Will have agreed to distribute among its members such a sum as in our present payment is 
equal to £1,287,242. When it is considered," adds Mr. Morgan, " that, exclusive of all this, 
the sum of £72,600 has been paid ever since the year 1800, for the interest of those members 
who have surrendered their policies to the Society, and that above £35,000 has been paid dur- 
ing the last four years on account of Income Tax, it is impossible not to admire such an Insti- 
tution, and to express an ardent wish that, proceeding in the same course of moderation, 
economy, and prudence, it may always adopt such measures as shall secure, and ever extend, 
its benefits to the latest period.'''' This wish has been fully realized hitherto. 

t This should be £1,000,000, but it is printed £990,000 in original address.— Note, 1866. 



EE VISION OF THE EQUITABLE BONUSES. 337 

warnings of the Actuary, the plan was, with various modifica- 
tions, continued down to the close of the year 1816, when it was 
finally abolished, and, by way of equivalent, and also by way of 
the greater protection of the funds, the participation in the sur- 
plus was limited to the 5,000 oldest policy-holders, a regulation 
still continued in force. 

Mr. Morgan's views of the importance of this change are fully 
expressed in his address to the Court in December, 1819. The 
following brief extract therefrom will answer our present purpose. 
" From the experience of the last three years, the regulations of 
(commenced in) 1817, appear to have had no other effect than that 
of rather lessening the number of new assurances, which however 
considerably exceed the number of old assurances cancelled, so 
that the Society still continues to increase, only more slowly. 
This," he adds, " is the necessary consequence of such a measure, 
and was to be expected. But it should be observed, on the other 
hand, that the Society may now regard its increase without 

APPREHENSION !" 

Passing from the financial considerations to those purely of 
equity — although in a Mutual Society at least these will be closely 
associated — we again leave ourselves in the hands of the North 
British reviewer, endorsing as we do nearly all that he has said 
on the subject: — 

" . . . . No competent defence has ever been made of the system, by 
which the long lives reap their enlarging shares of benefit at successive pe- 
riods of investigation, by profits being allotted to them in proportion 
to the amount both of their original assurance, and of additions made by pre- 
viously declared bonuses. . . . The long-standing and numerous policies of 
Associations conducted upon the plan, so far from being attractive to new 
members, will probably with increasing experience, be found to be the reverse. 
The oftener the periods of allocation recur, the greater the evil and the injus- 
tice under such a system of division. This accumulative system of bonus ad- 
ditions, if brought into action every ten or every seven years, is bad enough ; 
but when it is carried into effect every five years, our astonishment is, that 
it does not produce results more startling than any that have yet appeared in 

advertising type In truth, it needs no prophet to predict, that 

if this accumulative plan of heaping up bonuses on the old policies were rig- 
orously and permanently carried out, the discouragement to new entrants 
would become so great, that few would be attracted to such Offices, — that 
with a decreasing or even stationary business, the fallacy would become more 
apparent than it does, or can do, so long as business is flowing in with an 
annually increasing volume ; and that thus an accumulative process of de- 
cline would ensue, and the Office would effectually wind itself up, and shut 
its own door." 

He afterwards qualifies, to some extent, the above remarks : — 

" Still, however, it must be admitted that the Offices which, within endurable 
limits, favor the old lives, will in all probability retain a strong hold on the 
support of many. Most men are apt to think well of their own prospects of 
longevity. The assured who dies after paying only a few premiums, is, from 
narrow views, and a mistaken application of the ordinary mercantile analogy, 
regarded as causing ' a loss' to the Society. The pure principle of Life As- 
surance is, it is thought, very well so far ; but, in the estimation of some, it is 
rendered all the more attractive by having superadded a bonus-lottery, in 
which the long livers draw the prizes." 



338 NON-BONUS PLAN. 

In conclusion, he re-asserts, as a demonstrable fact, that the 
profits have arisen out of the contributions of all the members. 
He adds : — 

" Eacli several policy-holder, therefore, from the youngest to the oldest, has 
a right to participate in what each has a share in creating. The interest of 
each in the surplus fund is just the difference between the payments actually 
made, and those which would have been demanded had the precise rate of mor- 
tality been foreknown. The scheme of division, therefore, is certainly the most 
equitable, and most in accordance with the strict principles of Life Assurance, 
which distributes the profits among all the policy-holders without preference of 
classes, and so as to include the members who die early as well as those who live 
long" 

In this opinion we most entirely concur. The man who has 
paid one premium, which was greater than the charge for the ac- 
tual risk incurred by the Office, is as much entitled to the return 
of his contribution to the surplus as the man who has paid fifty 
premiums ! We even go to the length to assert with Mr. Farren 
that, " When a man says, ' If I live on, I shall get a larger sum 
added to my policy,' he is perverting the principle of assurance, 
which is to make those who live long pay for those who die 
quickly ; it is to endow the widow and children, and not the gray- 
headed man. The Tontine plan of distribution, therefore, in any 
of its forms, finds very little favor with us. 

NON-BONUS PLAN. 

While most persons are seeking to assure in Offices giving large 
bonuses, and most writers are recommending them to do so, there 
are others of the latter who set their faces against the bonus 
system altogether, calling it speculative, and surround it with all 
sorts of evil consequences. The writers who pursue this course 
have generally some particular Office to serve ; nevertheless, we 
must take their arguments for what they are worth, and they 
claim some consideration. Here is Mr. Sturrock arguing against 
the system of large bonuses, and those who do not know the 
Office he is " writing up, 1 ' may be surprised by the line of argu- 
ment pursued. 

" The system of assuring with Offices giving large bonuses is very disadvan- 
tageous where assurances are strictly for the protection of families. Suppose 
that at the age of 30 a yearly sum of £25 was to be devoted to that purpose. 
In the Offices charging high premiums, that sum would secure £936 ; in those 
charging the moderate premiums, £1,205. The difference between the sums, 
£269, is exactly the same as an immediate bonus of that amount, to be paid 
by the latter Office to the family in case of early death. Before the same bene- 
fit could be obtained from the high premium Office, the assured would have 
required to have lived for fourteen years after his assurance, even though so 
high a rate as 2 per cent, were to be added yearly. This defeats the true 
purpose of assuring, as the object of every parent should be to secure at once 
as large a sum as possible, and he who resorts to Offices exacting high pre- 
miums, undoubtedly sacrifices the interests of his family for benefits in a great 
degree only prospective and contingent." 

There is no doubt that even bonuses, like everything else, may 
l>e purchased " too dearly." 



THE REVERSIONARY BONUS PLAN. 339 

Mr. Sang objects to the bonus system, on grounds we have al- 
ready discussed. He says, "That it enables the present members 
to appropriate to themselves all the over contributions of their 
predecessors ;" and he cites an instance in which a Life Office 
anticipated the profits to the extent of £126,060. He admits 
that, in all probability, the error was unintentional, but says that 
it rather aggravates than palliates the evil, that, on account of 
the involved nature of the transaction, all this may be done un- 
wittingly, with the best intentions in the world." 

We will not pursue this point further. Enough has been said 
to give the reader an impartial outline of the subject, which is all 
we aim at. Any points bearing on the subject, which have been 
hastily passed over, will be discussed in the following chapter, 
which treats of a subject of vital importance. 

We said just now that it was a matter of little moment to an 
Office in what manner the assured applied their bonuses : that is 
to say, whether they take the cash, accept of a reduction of pre- 
mium, or claim a reversionary bonus. When viewed, however, in 
relation to Tontine bonuses the matter assumes a different aspect 
— or at least the aspect is presented in an aggravated form. The 
reader knows that before a sum is assured upon any life that life 
undergoes a strict medical examination, and if symptoms of disease 
are apparent the life is rejected. Now in the case of a bonus dis- 
tribution the health of the assured is not taken into account. The 
reader will say, " of course not, there is no occasion : bonuses are 
declared out of past profits, and every man is entitled to his pro- 
portion during his period of membership." So far he only reite- 
rates a principle we have already laid down. But the difficulty 
arises in this respect — that most Offices give the assured an option 
as to the application of the share of surplus allotted to them; and 
then comes into play the right of selection against the Office, upon 
which we have already offered some observations. 

It will be said, " This objection applies to the reversionary bonus 
plan under any aspect." Granted — but not to the same extent. 
Turning back to the examples at page 334, A, who takes a rever- 
sionary bonus for his £50 cash, of £100, being at that time on his 
death-bed, obtains a very decided advantage by the exercise of his 
right of election. But extend this to the Tontine system. As- 
sume that A's policy has been in force 15 years, and that the 
bonus is at the same rate as is assumed in the examples, namely, 
£1 per cent, per annum during the currency of the policy. What 
is the consequence? Why, that he takes £150 instead of £50; 
and the reversionary bonus this will purchase is £330 instead of 
£110! This is the inevitable effect of the Tontine system upon 
the funds; and at the older ages, where life becomes still more 
precarious, the option under any, but more particularly under this 
system, becomes still more dangerous. 

We have no desire to fix the whole of the evils of the rever- 
sionary bonus plan upon the Tontine system. We simply say of 



340 EXPLANATION OF BONUS TABLE. 

this system that it presents, in an aggravated form, all the weak 
points of the bonus system. And as to reversionary bonuses 
generally, it is clear that the option should be accompanied with 
a strict medical examination. A reversionary bonus is clearly 
nothing more or less than effecting a new Assurance : a rever- 
sionary bonus under the Tontine system is the same, but generally 
for a larger amount. 

Out of these considerations the reader will learn why some of 
the Offices may have considered it desirable to limit the applica- 
tion of the bonus to reduction of premiums only. 

EXPLANATION OP BONUS TABLE. 

The intention of the following Table is to supply, at a single 
glance, all the more generally required information regarding the 
distribution of profits by the several Life Offices now in existence. 
The Table is unavoidably imperfect. Still it contains a very large 
amount of information never brought together in a connected 
form previously. The arrangement is intended to elucidate, as 
far as possible, the points discussed in the previous chapters. 

In making inquiries as to the date of the first division of profits, 
some confusion has arisen with some of the Offices, as to the 
periods when they first issued participating policies : an actual 
division of profits does not generally take place for several years 
after this event. Several of the older offices have only during the 
last few years admitted the assured to participation ; and in one 
or two cases no division has yet been really made. 

The column as to the principle upon which the profits are 
allotted to the members is in an unfinished state. Some of the 
Offices appear to have no fixed rule ; the point apparently being 
determined by accident, necessity, or the caprice of the particular 
actuary employed to conduct the valuation. This does not apply 
generally to Offices having an actuary on their staff. 

In the column stating the persons who are entitled to partici- 
pate, the term " all policies" means all participating policies, 
irrespective of the term of membership. 

Where we have not felt confidence in the accuracy of our in- 
formation, we have preferred to leave a blank — which, however, 
each reader ought to be able, without difficulty, to get filled up 
by the Office in which he is interested. 

Out of the whole number of existing Offices there are not three 
whose prospectuses contain even the reasonable and necessary 
information contained in this Table — that is to say, which contain 
sufficient to answer all the requirements of the Table ! 



BONUS TABLE. 



341 



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CHAPTER V. 

THE FINANCE OF LIFE ASSURANCE. 

In these days of financial disaster, when no Institution or Com- 
pany will long be considered sound which is not in a position to 
prove itself to be so, it will neither be considered time ill-spent 
or labor ill-bestowed, to direct some attention to the finance of 
Life Assurance. 

For the reasons stated in the previous chapters of this division, 
Insurance accounts are not of a class to be readily understood by 
persons wholly uninitiated ; and it is sometimes almost as fatal 
to an Office to be considered too rich as too poor. A notable in- 
stance of this has occurred in the history of the Equitable Society. 
In the year 1826 one of the Directors (!) of that Society proposed 
to divide a million of the surplus, without ascertaining ichat that 
surplus might be! "but the sound judgment of Mr. Morgan, the 
actuary, prevented the step being taken."* It is not very many 
years, either, since Mr. Babbage thought it necessary to guard 
his readers against a mistake, which he pronounced to be " not 
unfrequent ;" viz. — that of considering the capital accumulated 
and in the possession of a Society at any period, as so much pro- 
fit!] And it is only about a century since that the Government 
actually entertained a similar view, and, as we have already seen, 
were about to take very unscrupulous steps in consequence.^ 

Now, it generally happens, that however large the accumulated 
funds of an Office (as distinguished from its surplus funds) may 
be, it has corresponding liabilities. The real point of inquiry, 
therefore, turns the other way, viz., not whether the funds in 
hand are greater than the liabilities, but whether they are suf- 
ficient to meet them — all that exists over the sufficiency being 
clearly surplus. 

But even if, at any given period, a surplus be actually found 
to exist, it becomes a matter of considerable interest to the ac- 
tuary, and of importance to the Office, to know how such surplus 
has arisen. It may happen that a surplus exists because the mor- 
tality for a certain period has been less than was expected under 
the Mortality Tables under which the Office was based, and there- 
fore less than was provided for in the rates of premium. Or it 
may happen that during the particular period in question, the 
rate of interest realized has been higher than that anticipated ; 
and as high rates of interest are generally indicative of monetary 
pressure, more policies are frequently lapsed or surrendered than 
at periods of greater prosperity ; and whether this latter be a 
source of real advantage to the Office or not, it certainly bears 

* Samuel Brown's Thoughts on Life Assurance. 
t Babbage's Comparative View. X Vide page 47. 



346 VIEW TO BE TAKEN OF A FAVORABLE MORTALITY. 

the appearance of present advantage. On the other hand a dis- 
advantageous state of the funds may be attributable temporarily 
to an unusually heavy mortality : although this is not a very 
probable supposition, and would (except under very special cir- 
cumstances) be indicative of unsound management. There is 
very little fear of any deficiency arising from the rate of interest 
actually realized : as the lowest probable rate is (very properly) 
assumed in the calculation. 

Now, assuming an Office to show an excess of funds from either 
of the causes first indicated in the preceding paragraph, there 
would be no indication of permanent prosperity. On the con- 
trary, by direct consequence of the small mortality in one period 
there exists, not only the probability, but the certainty of greater 
mortality at subsequent periods. So, again, if the prosperity of 
an Office at any given date be attributable to the realization of 
a rate of interest higher than the ordinary rate over an average 
of years, it requires no very deep knowledge of the subject to 
understand that this prosperity cannot be calculated upon as 
lasting. 

As the point with respect to the results arising from a favor- 
able mortality over any given period has some important bear- 
ings, we purpose to consider it more minutely. 

If our conclusions on the subject of " selection," and the conclu- 
sions of the majority of writers we have here quoted, be sound, 
it follows that the mortality in a young Office, or amongst the 
newly assured lives in an old Office, will for several years be 
below the average ; and therefore, the claims on the funds in 
respect of such lives will be smaller than that amongst an equal 
number of assured lives of longer standing. This, however, being 
a point well understood, no actuary, who valued his reputation, 
would lead a Company on to the division of any surplus result- 
ing from this cause. Yet from the tone adopted at various meet- 
ings convened for receiving reports of actuarial investigations, as 
well as from the face of the balance-sheets presented, it is diffi- 
cult to believe that such errors are not committed ; and what is 
worse, committed wilfully. 

Mr. Samuel Ingall has raised the voice of varning on this 
point. " If care be taken in the selection of lives," he says, 
"the mortality for a number of years will be very low, and if the 
Office attempts to divide its profits, assuming that that low rate 
of mortality will continue, its members will be wofully disap- 
pointed at a future period" Other experienced writers have 
been equally emphatic on this point. 

These preliminary observations will convey some idea of the 
nature of the points to be considered in the present chapter. 
The object to which they all, either directly or indirectly, point 
is the growth of the accumulated fund of an Assurance Office, 
and the proportion it should bear, at any given period, either to 
the premiums received, or the existing liabilities of the Office* 



GROWTH OF THE ACCUMULATED FUND. 347 

Dr. Farr, after pointing out the great importance (as we have 
already done) of determining the correct rate of premium to be 
paid for an assurance, has added " one of still more vital impor- 
tance in the finance of Life Assurance, is this : If A, aged 35, or 
any other age, pay a premium of £10, of £100, or of any other 
sum yearly into a Life Office, what sum should that Office have to 
deposit to the account of A at the end of the first, second, third, 
fourth, and every subsequent year in order that it might fulfil its 
engagements ?" 

Now it is hardly to be expected that the bulk of our readers 
should understand the full force of this proposition without some 
additional illustration. This we purpose to give, by calling in the 
aid of several other writers. 

Mr. Samuel Brown has well explained that if a Company were 
started to assure lives at every age, from birth to extreme old 
age, and if the places of all the lives which dropped were supplied 
by others, from year to year, without any increase in the members 
of the Society, and without any improvement in the health of the 
assured, " then the mortality of the first year would be the same 
as the last, and there would be no increase in the numbers of the 
deaths, because the average age of the members would remain the 
same." Now, in practice, it is impossible that such conditions 
can be realized, and here, therefore, so to speak, the difficulties 
begin. A Life Office cannot, in the very nature of things, secure 
that uniformity of operation which would test, in a natural form, 
the elements of its solvency: hence it has to resort to secondary, 
and scientific means, of doing so. 

Mr. Morgan, in one of his able addresses to the Court of the 
JZquitable Society, remarked : — " In a Society which is increasing 
the number of its members — and particularly as such increase 
cannot in the very nature of things be uniform year by year — the 
progress of the accumulated fund cannot be defined : — hence the 
necessity for periodic investigations." He draws an illustration 
in point from that Society which he so long and so nobly guided 
onward in its career of success : — 

" In the Equitable Society the Assurances are made upon lives of all ages, from 
eight to sixty-seven years ; their number, instead of being limited, is continu- 
ally increasing, and the sums assured at the end of the last year (1792) 
amounted to more than three millions. Is it, then, at all surprising, that its 
capital increases with great rapidity ? It would be an alarming circumstance 
if the contrary were true. The period at which the claims and the premiums 
will become equal in an Institution of this kind must necessarily be very dis- 
tant. If the Society be limited only to its present number, it is indispensably 
necessary that the premiums should continue to exceed the claims for more 
than half a century, in order to enable it to fulfil its engagements. But when 
it is considered that its members are continually increasing, the period is ren- 
dered still more distant, and it would indeed be a fatal mistake to conclude 
from the quarterly accounts* which are laid before the members, that this 
increasing capital of the Society is, like the increasing capital of a tradesman, 
so much addition to its profits. It is, in fact, no more than so much addition 

* It was the custom with the Equitable to hold quarterly courts. 



348 THE SACKED FUND. 

to the fund which ought to be improved with the utmost care, in order to en- 
able the Society to discharge those heavy demands which will infallibly here- 
after be made upon it. And," he adds with becoming earnestness, " I have, 
in more instances than one, been a witness to the fatal consequences of this 
delusion, where the Societies, confiding in the magnitude of their capital, 
without having any regard to the magnitude of the claims which a few years 
would bring upon them, have indulged themselves in the belief of their grow- 
ing prosperity, till their ruin has become inevitable. I am happy, however, 
to think that while Societies have begun in error and ended in disappoint- 
ment, the determinations of this Society have hitherto been so temperate and 
prudent as invariably to improve its credit and usefulness. It is my earnest 
wish that it may always proceed with the same circumspection ; and though 
I believe there is no reason for apprehension from the present members, yet 
it is possible, however flourishing the Society may be, to entertain too high 
an opinion of its wealth, and in consequence to adopt measures which may 
endanger its security." 

What applied to the Equitable applies equally to all other So- 
cieties ; and it would indeed be well if this sound advice was 
more generally followed. 

In a subsequent address (Dec, 1819) he reverted to the same 
point, under another aspect. 

" Though possessed," he says, " at this time of a surplus of more than three 
millions, it must be observed that the number of those who are to share in it 
is great in proportion, and, in consequence, that the sum which would have 
been sufficient in 1810 to provide for any given addition to the claims, will 
now, exclusive of the advanced age of the members, which renders it of 
greater value, be altogether insufficient. No conclusion therefore can be 
drawn as to the magnitude of the additions which a Society can afford to 
make, either from the amount of its capital, or even of its surplus stock, 
unless regard is had at the same time to the number of its members ; and it 
may be comparatively as rich, and able to make those additions, when 
possessed of a surplus of £100,000, as when possessed of a surplus of one mil- 
lion. Hence, it appears (he adds), that this Society could with equal safety 
afford to add £1 per cent, to the claims in 1800, when possessed of a surplus 
of £484,000, as it can at present — when its surplus exceeds three millions J" 

Mr. S. Brown furnishes us with equally important considera- 
tions to the same end : — 

" Enough has been shown to prove that, both by theory and the practical 
results, in existing Companies, the mortality must continue to increase for 
many years after admission, even if the actual experience of the Societies cor- 
responds with the tables used for their calculations. But if a more favorable 
rate prevailed, the period in which the maximum of mortality would be at- 
tained must either be longer deferred, or the claims would increase at the last 
with such rapidity, as after a long course of confidence in growing prosperity, 
would excite alarm in the minds of those members of the Company who had 
not considered that this was a consummation which ought to have been fore- 
seen and duly provided for. The continual accumulation of the Capital, 
then, in the early existence of a Society, which many not accustomed to the 
subject, are apt to consider as the effect of excessive caution, and are some- 
times with difficulty restrained from breaking in upon, ought to be regarded 
as a sacred fund not to be diminished without the most skilful and diligent 
inquiry into the future prospects as well as the past history of the Society." 

And again: — 

" The mortality in a Society must continue to ncrease annually for many 



RELATION BETWEEN PREMIUMS AND CLAIMS. 349 

years after its establishment. The provision, which is made for future years, 
ought to be one which contemplates the Society attained to its full growth ; 
and consequently, in the earlier periods of its existence a continual surplus 
must accrue, and be carefully improved, with its accumulations, to meet the 
demands which at some future time will inevitably be made on the funds. 
. . . . Few persons are aware of the length of time which must elapse 
before a Society attains its maximum of mortality." 

What are the deductions to be drawn from the jDreceding con- 
siderations ? That the peculiar circumstances attending the 
growth of Assurance Offices give rise to the necessity of actua- 
rial investigation. That the peculiar nature of their liabilities 
requires the accumulation of their funds for a long series of years 
in order to meet their distant and probably increasing engage- 
ments ; and that any departure from these courses, either by ne- 
glecting to test the growth of the fund, and comparing this with 
its liabilities, or any attempt to impoverish the fund by premature 
or unjustifiable divisions of so-called profits, will prove highly 
disastrous, if not immediately, at least by the time the Society 
shall arrive at maturity. And this is precisely the case. So far, 
then, we have progressed satisfactorily ; but still we have arrived 
at no very definite idea of what should be the progressive growth 
of an Assurance Fund in relation to the functions it has to fulfil. 
This is the next stage to be determined. 

We shall again fall back upon Mr. Morgan : — 

" It must occur to every person (he says) that in an Institution of this kind, 
which engages for an annual sum to pay another sum forty or fifty times as 
large, on the extinction of a life, whenever that event shall happen, that it 
will be necessary that those payments should be made for several years be- 
fore they shall have accumulated to such an amount as will be sufficient to 
pay the sum assured. Suppose, then, that instead of one life there be 1,000 
lives upon which such annual payments are made, it is evident that the accu- 
mulation of these payments must go on to increase very fast for several years, 
in order at a distant period to be sufficient to discharge the sums which will 
become due on the extinction of those lives ; and that the person who should 
consider the whole, or even the greatest part of this accumulation as so much 
profit, would find himself fatally deceived at the final close of the accounts." 

He gives this case: — Suppose a Society consisting of 1,000 
members, whose mean age is 30, were to assure no life for a 
longer term than one year ; in this case it is evident that the 
amount of the premiums ought to be no more than just sufficient 
at the end of the year to pay the claims that have taken place 
during the course of that year. In other words, if each member 
were to assure the sum of £100, he would be required, according 
to the present terms of the Equitable Society, to pay the sum of 
£1 13s. 3d. One thousand such premiums will amount to £1666, 
and this sum with its interest for the year will be found nearly 
equal to the whole of the claims at the end of that year. If the 
term be extended to four or seven years, the premiums will be a 
little greater than the claims in the first year, in order that a 
small surplus may be improved for the greater number of deaths 
in the following years : since it is well known that life is continu- 



350 KELATIVE VALUES OP PREMIUM AND SUM ASSUEED. 

ally rendered more precarious as it becomes older, and of conse- 
quence that a greater proportion of assurances will become claims 
in the last than in the first year of the term. But if instead of 
four or seven years the term of the assurance be extended to the 
whole duration of life, it is plain that the difference between the 
premiums and claims in the first and next succeeding years must 
be considerably greater in the latter case than in the former. 
Thus, if the mean age of the members be supposed, as above, to 
be 30, the annual premium for each £100, to be continued during 
the whole of life, will be £2 13s. 3d. One thousand such pre- 
miums will amount to £2,666, or to £1,000 more than if those 
Assurances were made only for one year. This sum of £1,000, 
therefore, is the surplus which ought to be laid by in the first year 
towards paying the claims when they shall hereafter exceed the 
annual premiums. In the second year the surplus will be a little 
less. In the following years it will continue to diminish, till in 
the course of about 30 years (if no new assurances be made) the 
annual premiums and claims will become equal ; and, after this 
period, it will be necessary for discharging the claims, to have re- 
course to a part of the accumulated surplus in each year till at 
the end of about 60 years the remainder of this surplus, together 
with the premiums which have been paid at the beginning of the 
year, will be just sufficient to pay the last claim. But if the 
number of members be always continued at 1,000 — that is, if new 
members be constantly admitted at the age of 30 as the old ones 
drop off — the surplus will go on to accumulate for more than sixty 
years before the claims and the premiums become equal.* This 
brings us to a more practical aspect of the question. 

The object, or, so to speak, the necessity of an accumulated 
fund, is rendered apparent from a consideration of the precise cir- 
cumstances of the case. At the commencement of a Life Assu- 
rance contract the present value of the net premiums expected to 
be received in respect of the policy will exactly equal the present 
value of the reversion of the sum assured. But year by year 
afterwards the value of the future premiums decreases (by reason 
of there being a less number of payments to receive), and the 
value of the sum assured increases (by reason of the shortened ex- 
pectation of life), so that at the end, say of five years, in an 
account where no new lives were introduced, the difference would 
become apparent ; and to the amount at least of this difference 
should the Office have added to the amount of its cash invest- 
ments ; so that taking all the items of account together they 
would still balance. 

This point was explained by Mr. Finlaison to the Select Com- 
mittee in 1853, to the purport we have just stated: — 

" At any future period, such as for example at the end of seven years, a life 
that has been previously assured will have attained an advanced age. At 
that advanced age, the premium which the party is paying will assure a cer- 

* Address to the Court of the Equitable Society, 7th March, 1793. 



ILLUSTRATION OF DE. FARR's TABLE. 351 

tain amount of money in part of the sum originally contemplated, because 
the life annuity payable, which is called the premium, is an equivalent for so 
much of the present value of the benefit that is forthcoming-. Then there is 
a portion of the account assured that the premium at the advanced age will 
not assure, which has to be got out of capital at a rate of interest involved in 
the premium, and in the present value. That portion which is so deficient is 
expected to be met by the funds which the Company possesses for the time 
being." 

Which being "freely translated" out of actuarial into popular 
language means this : that the difference between the premium a 
man pays who assures at 30, and the premium which would be 
required of him if he assured at 37, must be saved out of the 
premiums paid during the intervening seven years: so that at the 
period of valuation the Office may have from the two sources — 
(1) the future premiums and (2) the accumulated stock — the values 
necessary to balance the increased value of the sum to be paid at 
death. As this difference is easily ascertainable, it is by no means 
difficult to predict what the accumulated fund should amount to 
in relation to any given number of assurances. 

In illustration of the principle laid down by Mr. Morgan, and 
the propositions just stated, Dr. Farr laid before the Select Com- 
mittee of 1853 the following Table. It shows that for the first 35 
years the premiums alone should be more than sufficient to meet 
the claims, but that after that period the operation becomes re- 
versed ; and the claims become much greater than the income, 
requiring accumulated funds or capital to supply the deficiency. 

It is assumed in this Table that 291 persons enter the Society 
every year at the age of 35, and for equal annual premiums of £10 
insure £425. The progress would be as follows : — 









Annual 


* Payments 


Excess of Income at^t- 
from Premiums alone. OIOCK - 








Income. 


on death. 


Starting. 




.. £2,910 




£2,910 


£2,910 


End of 1 


year. . . . 


. 5,790 


£1,275 


4,515 


7,512 


a 


10 


years . . 


. 30,200 


14,484 


15,716 


119,960 


" 


20 


" .. . 


. 53,640 


32,802 


20,838 


380,958 


a 


30 


<( 


. 72,100 


57,510 


14,590 


730,918 










Deficiency of Income, etc. 


tt 


40 


t< 


. 83,530 


90,312 


6,782 


1,031,077 


" 


50 


u 


. 87,750 


116,298 


28,548 


1,167,276 


tt 


60 


tt 


. 88,330 


123,540 


35,210 


1,189,700 


Ulth 


nate 


state . . . 


. 88,340 


123,670 


35,330 


1,177,667 



Dr. Farr says : — 

" The Table may be read thus : a Society so constituted would in the 30th 
year receive £72,100 in premiums, pay £57,510 on deaths ; it should have 
£730,918 under investment. In the 50th year the annual premiums (£87,750) 
would be exceeded by the payments on deaths (£116,298) to the extent of 
£28,548, which would be more than balanced by the interest of the Stock, 
£1,167,276 invested at 3 per cent, interest. The issuing of 281 policies per an- 
num for an average amount of £425, would not be considered a large business. 
No deduction is made for management expenses, none having been provided 
for in the example." 



352 RULE FOE ASCERTAINING AMOUNT OF RESERVE. 

The condition upon which the preceding Table is founded, 
like those of some of the preceding illustrations, is one which 
we have already explained as impossible to realize in practice, 
namely, that a fixed number of members enter the Society each 
year, all of one given age. Hence their practical value becomes 
lessened, and we have to resort to other means and tests. If, 
indeed, the system of " Maximum Offices," suggested some few 
months since by the Editor of the Post Magazine, was carried into 
practice, there might in time be some near approximations to the 
tabulated results just given. This, however, we have to wait for. 
In the meanwhile we turn to other estimates which have been 
devised. 

The Select Committee appeared to take some pains to discover 
the existence of any rule or principle of approximating the pro- 
portion the funds in hand should bear to the premiums received 
on all existing assurances, and were not unsuccessful in their 
object. The following is the question put to Mr. J. J. Downes, 
and his answer in extenso: — 

" Have you arrived at any general computation that would show what pro- 
portion the existing amount of accumulated stock of the Company would bear 
to its gross liabilities at any particular moment ?" — " Yes ; I found that as far 
as our experience goes, that is, for 30 years, without reference to rate of 
interest or any rate of mortality or margin, the value of the entire liability on 
the existing assurances is about one-half the amount of the premiums received 
on those assurances ; therefore I say on a general principle that if we have 50 
per cent, of the premiums which have been received on the existing business, 
what has been received on those which have gone off has been spent in claims 
and expenses. If we say we have issued 100 policies, for instance, and we have 
got 20 of them left, if we have received on the 20 policies that are left, say 
£100, and we have more than £50 in hand, we are quite safe, and all we have 
more than £50 may be considered as profit. There is another point with re- 
spect to that : an Office that has already declared bonuses will have made ad- 
ditions to its policies, and therefore it should have capital in hand to meet the 
bonuses, and as a general view (I do not say it would be exact) it would enable 
you to form a correct estimate as to the amount of the liability. I should say 
for every £100 addition to a policy you should have as much per cent, as is 
equal to the age of the assured. Suppose, for instance, a man of 50 has had 
£100 addition to his policy, the Office should have £50 in hand to meet that 
claim, and if his age is 60, it should have £60. (Answer No. 1132.)" 

For Offices established on the Northampton Tables he con- 
sidered 44 per cent, of premiums in hand would be sufficient, and 
therefore he concludes " the limit of safety lies between 45 per 
cent, and 55 per cent." 

The mean, then, according to Mr. Downes' view is 50 per cent. 
Mr. S. Ingall coincided in this. He says from 47 to 53, or " 50 per 
cent, in round numbers of the premiums paid." But he gives us 
another test. " I should say that the Office should have 1 per 
cent, per annum on the amount of the existing insurances up to 
about 20 years ; that is, if an Office has been in existence 20 years 
it ought to have about 20 per cent, of the amount of the existing 
assurances" — not of the premiums. Mr. T. R. Edmonds considers 
42 per cent. ' ' a fair reserve for Offices whose business is of the 



TABLE. 



353 



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354 EXPLANATION OF THE TABLES. 

first class." It must be explained, however, that the 42 per cent, 
applies to expired policies as well as those in existence ; while the 
50 per cent, of the former witnesses is applicable only to those 
remaining at the period of investigation. Mr. Higham, when in- 
terrogated on the same point, answered, "I do not think there can 
be a better rule than that suggested by the previous witnesses, 
namely, that the reserve to be made should be one-half of all the 
premiums paid on all the existing policies," thus fully confirming 
the views of the previous witnesses. 

Of course an Office charging high rates of premium would not 
in reality require to have in hand such a large per centage of the 
premium received as the low rate Offices ; although for the purposes 
of a valuation under its'oion Table, such might appear necessary. 
But these more minute considerations do not form part of our 
present purpose. 

It must be remembered also that the above estimates apply to 
Offices transacting what is termed first-class Life business. An Of- 
fice assuring diseased lives, to any extent, or even doing " Industrial 
business," would require to have larger proportions of the pre- 
miums in hand than is above stated : for the reason that the dura- 
tion of life of the members being less, the proportion in hand will 
have less time to accumulate, and should therefore be corre- 
spondingly greater. These points, however, can always be deter- 
mined by a skilful actuary, acquainted with all the circumstances. 
They need not, therefore, be further discussed here. 

Dr. Farr has since very materially elaborated the Tables he 
laid before the Select Committee, and although, as we have 
already intimated, Tables which are based upon unrealizable as- 
sumptions are simply of theoretic value, the Table of Dr. Farr so 
completely illustrates the finance of Life Assurance that we have 
prepared an abstract of it for insertion here : and if the reader will 
only bestow sufficient time on the columnar headings to under- 
stand them, ahd will follow out the arrangement of the Table 
(which has been slightly altered from the original one to facilitate 
such reference) he will probably possess a more clear notion of 
the financial working of a Life Office than he has ever possessed 
before. 

Several of the terms employed as headings to the columns of 
the preceding Table appear to require some explanation. — The 
term " Stock," column 11, is one of these. The sums in this column 
represent the proportion of the proceeds of the former columns, 
which should be held intact to meet, with accumulations, the sums 
assured as shown in column 12. If circumstances prove favorable 
— as, for instance, if the rate of interest realized exceeded, on an 
average of years, 3 per cent. — (the rate adopted in the Table) — ■ 
or if the mortality was more favorable than that anticipated by 
the Table (English Table No. 2) then the sums actually in posses- 
sion of the Office would exceed those stated in column 11 — but 
under no, circumstances ought they ever to be less ! If there be 



DR. FARE'S EXPLANATION OF HIS TABLES. 355 

any surplus from the sources indicated, or otherwise, it will be 
applied according to the constitution of the Office. If a Pro- 
prietary one, to the proprietors ; if a Mutual one, to the assured, 
or for a reserve fund. If a Mixed Office, the chief part to the as- 
sured, the remainder to the shareholders. 

The following explanation by Dr. Farr applies to the preceding 
Tables :— 

" The accounts of a Life Office, to "be intelligible, must be divided into two 
distinct branches ; they must be viewed as consisting of two distinct funds ; 
for its property consists (1) of adequate securities to pay in money the sums 
which it should have in deposit to the account of each policy ; (2) of adequate 
securities in the form of reserve, or rest, or guarantee fund, to enable it to 
establish its existence, to carry on its business, and to fulfil its engagements 
with certainty. For the sake of distinction the first fund might be called 
' stock,' the second ' capital.' The value of the stock which should stand to the 
account of each policy, is the accumulated amount of the excess of the inva- 
riable premiums, over the precise premiums which cover the risks up to the 
date of valuation ; it is equal to the present value of the sum assured, minus 

the present value of the future net premiums " Examples may 

be given. " Thus if C, of the age of 25, pays an annual premium of £130, his 
life is insured for £5,590, and at the end of ten years, after he has paid £1,300, 
the Society should have £598 to his account as the surplus of the premiums 
of £100 received, and required with the future net premiums to insure the pay- 
ment of £5,590, at his death. . . . The sum of the several amounts in 
deposit to the account of each insured life is the ' stock' of the Insurance So- 
ciety ; which is solvent if it possesses an equivalent value in good securities." 

But in a Society constituted in accordance with the supposition 
of these tables and properly managed, there will be a surplus — 
and a large one — not from the sources already indicated, but from 
the loading of the premiums. The sums stated in column 5 are 
the net premiums only, and of themselves are sufficient to meet all 
expected claims. But these premiums are, in practice, subject to 
a loading of 20 per cent. The proceeds from this loading are set 
forth in column 13, and in the next column is stated the sums 
which at each stage of the Society's progress may be held as suf- 
ficient for all proper charges of management. As our abstract is 
arranged, after the first ten years, in quinquennial periods, we 
require a supplementary table to show the surplus arising from 
this source, and we have it. 

As life premiums are payable in advance, the preceding table 
begins with 0, to indicate the operations of the first year. Down 
to the end of the sixth year, or seventh annual premium, the 
loading received would not meet the estimated expenses of man- 
agement ; indeed, at that period, the management account would 
stand thus: — Received, £15,948 ; expended, £32,000 ; difference, 
£1 6,052. This fully illustrates the necessity for subscribed capital, 
or a guarantee fund, to meet the crisis of these early years, if it be 
intended, as it ought to be in all Societies, to keep the " stock" 
intact. But by about the 16th year the loading has wiped off all 
the arrears of the earlier years, as well as the current expenses ; 
and henceforward a considerable addition should be made to the 
funds of the Society from this source. Here is the table : — 



356 TABULAE EXPOSITION OF THE EFFECT OF LOADING. 

Total 
Expenditure. 

Total receipts from loading during the first 5 years £8,608 £24,000 £15,392 

Do. '« " 10 " 30,956 44,000 13,044 

Do. " " 15 " 66,136 69,000 2,864 

Hgvgps© 

Do. « « 20 " 113,132 104,000 9,132* 

Do. " " 25 " 170,882 139,000 31,882 

Do. « " 30 " 238,208 176,000 62,208 

Do. " " 35 " 312,952 214,000 98,952 

Do. " " 40 " 393,794 253,750 140,044 

Do. " " 45 " 478,594 291,500 187,094 

Do. " " 50 " 565,624 331,500 234,126 

Do. " " 55 " 653,610 371,500 282,110 

Do. " " 60 " 741,886 411,500 330,386 

Do. " " 63 " 812,554 451,500 361,054 

This brings us to a point which we have been steadily approach- 
ing, and one which it is desirable properly to understand, viz., 
that assuming, as we are fairly entitled to do, that the Mortality 
Table will, where proper selection has been exercised, provide for 
all claims by death, and the interest realized upon the funds, over 
and above that assumed in the calculations, will provide for all 
losses and investments — there will still remain in all well-consti- 
tuted and well-managed Offices, a considerable surplus, after pay- 
ing all proper expenses, out of the loading of the premiums. 

We have already pointed out the reasons which would operate 
against any direct comparison between the table last given and 
the financial progress of any existing Office : the table is calculated 
with all the uniformity which theory can command, and particu- 
larly with respect to the number of lives admitted, their ages, and 
the sums secured : while in an existing Assurance Office, these are 
all fluctuating and uncertain elements. The sole object of the 
introduction of the table into this work, then, is not for the pur- 
pose of instituting comparisons between it and individual Offices, 
but that the reader should possess a correct notion of the growth 
of the funds of an Assurance Office. For the first 38 years of the 
existence of an Office, the income should be expected to exceed 
the outgo; the reverse then takes place; and the excess of funds, 
or the " stock" accumulated during this period, must not be either 
divided or expended, but carefully accumulated for the period 
subsequent to the first 38 years when, the outgo becoming greater 
than the annual income, it will require such an accumulated fund 
to fall back upon, in order to maintain a state of solvency. The 
reader may now understand the truth of a remark made some 
time since, that every Society may be considered young which 
has not existed some forty or fifty years. It is^ then that the 
crisis of its fate is pending; it is then that the prudence of its 
former management will be put to the severest test. 

We dwell upon this point the more earnestly from a knowledge 
of the liability to misconception which must exist in the popular 

* The excess is now reversed in favor of the Society, and so continues. 



EVERY ASSURER BRINGS HIS OWN BURDEN. 357 

mind. The fact of large accumulated funds, or a large annual 
income and a small annual outgo, are looked upon as unfailing 
signs of prosperity. How few understand the proportion which 
these items must bear to each other if the Office is to succeed, or 
how long an Office must go on accumulating funds, in order to 
meet engagements which in the end are as certain as the return 
of the seasons, or as the succession of darkness after daylight ! 
Comparatively few writers appear to us to have urged this point 
with sufficient stress. Those who have, deserve to be brought 
prominently forward. An able writer in Taitfs Magazine some 
few years since thus put the case: — 

" The necessity of all these Companies and Societies not regarding- the con- 
tributions of new members in the light of increased property, but calculating 
strictly and periodically, whether, if their roll were closed and sealed against 
all candidates, they could discharge responsibilities, and leave a balance, is 
apparent.. An Institution that could not accomplish that object is insolvent. 
It may recover, but the probabilities are against it. Friendly Societies were 
incompetent to conduct these investigations. Life Assurance Societies have 
the means, and their Managers can only culpably neglect them. The best 
rule in estimating their state is to count for nothing the probable influx of 
new members. They should see the practical conclusion that every man 
brings Ms own burden, and carry it out in tlieir accountings." 

This writer leads us away from the point immediately before us 
to one of sufficient importance in the finance of Life Assurance to 
merit some special notice. It is this — whether in an Office which, 
after a series of years, is found deficient in the ordinary amount of 
accumulated funds, the admission of young lives is likely mate- 
rially to improve its financial aspects. If the theory that every 
man brings his own burden be literally applied, such a notion is 
erroneous, and this appears to be the view of the great majority 
of writers who have touched upon the point. In addition to the 
preceding writer, here is Mr. Charles Ansell : — 

" The mere fact of young lives coming in would not improve a bad account; 
because they would bring their responsibilities with them. Each assurance 
which comes brings its responsibilities with it, and does not necessarily im- 
prove an account that is bad." 

Mr. Neison, as the exponent of the views of another class of 
Actuaries says, almost in the same words : — 

" As to the effect of introducing new assurances it is, on the face of it, 
evident that the introduction of new assurances would not help bad business 
which might have befallen to the Company, with regard to its prior assu- 
rances, because the new assurances would bring with them new liabilities. 
They might increase the money in the coffers, but the Company might be no 
better off." 

The moral, therefore, is still the same, whichever way we turn. 
There is no permanent patching up of an unsound Assurance 
Office. Numbers are, no doubt, essential for the purpose of 
obtaining a correct average; but their value has a preservative 
rather than a restorative tendency. Mr. Morgan touched the key- 
note to prosperity when, at the conclusion of one of his master- 
pieces, he said, " I must also add, that in all the circumstances of 
the Society, the preservation of its capital sacred and inviolate, is 



358 HOW LIFE OFFICES MAT PRACTISE DECEPTION. 

indispensable ;" meaning thereby such portion of the capital or 
accumulated fund as actuarial investigation did not show to be 
actual surplus. 

A knowledge that an accumulated and accumulating fund is 
necessary to the solvency of an Office, while it makes us cautious 
on the one hand, may render us open to deception on the other. 
We know that the accumulated fund should, at its minimum, be 
equal to the difference between the value of the premiums, and 
the value of sums assured ; and we know something of the way in 
which these respective values are, or ought to be, ascertained, but 
dishonest practices have crept in. 

A trader may practise deception upon his creditors in either of 
two ways. 1. By over-valuing his stock, and under-valuing his 
liabilities. 2. By valuing his stock fairly, but leaving his liabili- 
ties altogether out of the account. A Life Office can perpetrate 
similar malpractices. The processes may be divided under two 
heads. 

First. — By employing in the valuation a Life Table showing a 
longer duration of life than that on which the operations of the 
Society were originally based ; or by assuming a higher rate of 
interest than was originally contemplated — the former discrepancy 
deferring the period of the expected claims, and, at the same time, 
increasing the number of annual premiums expected to be received / 
the latter showing a more rapid accumulation of funds than had 
been contemplated. 

Secondly, and more generally, by valuing the future premiums 
at their gross instead of their net value ; by which means, all the 
loading, or charge of management and contingencies, is made to 
appear as an asset ; thus swelling out the apparent resources of 
the Office without making any provision for a very large item of 
its future liabilities ! 

With respect to the methods first named, the evil results may 
be either large or small, varying with the circumstances. If the 
new Mortality Table adopted be a correct one, and the new rate 
of interest assumed to be justified by circumstances, the change 
may be even beneficial ; although the former members, by having 
paid the higher rates deduced from the original table, will be 
placed in a very disadvantageous position with respect to persons 
newly assuring, unless some special scheme of appropriating the 
surplus be devised, as in the case of the Equitable Society. But 
where such a step is taken simply as a blind to extravagant 
expenditure or unsuccessful management, then it will assume a 
very serious aspect, and also a very prejudicial one. 

Any change, therefore, in the Mortality Table used by an Office 
may be looked upon as a very suspicious circumstance ; and no 
system of revision or audit of Assurance Offices could hope to be 
ever, in the remotest degree, successful, if especial attention were 
not paid to this point. 

The second method referred to is of sufficient importance to be 
considered under a separate chapter. 



CHAPTER VI. 

ON THE EXCLUSION OR OTHERWISE OF THE " LOADING " FROM 

VALUATIONS. 

The considerations involved in this chapter are of the greatest 
moment in relation to the finance of Life Assurance, and the proper 
conduct of Assurance Offices. 

The fact is too patent that many of the glowing valuations 
which have, during the last few years, been announced in con- 
nection with Companies proverbial for nothing but their reckless- 
ness of expenditure, and total disregard of all known rules for 
conducting life business, have been produced entirely by the dis- 
reputable process of including the " charge" on one side of the 
account without placing the liabilities it implies on the other side. 
By such means Offices hopelessly insolvent may be placed in the 
imaginary possession of almost fabulous wealth ; with surpluses 
exceeding the entire premium income of the Company during the 
whole period of its existence ! 

On lew points, perhaps, are Actuaries more fully agreed than 
upon the entire exclusion of the loading from valuations. Their 
objections, however, appear rather to be based on the abuse of the 
system, than upon any calm and deliberate consideration of its 
intrinsic defects or advantages. Nor is this much to be wondered 
at. The extent to which this method has been abused of late is 
sufficient to surround it with the most unmitigated mistrust. Yet 
we venture to think, and shall endeavor to show, that the principle 
of including the loading has within itself the most effectual means 
of checking the abuses which have hitherto characterized it ; that, 
indeed, like many other principles, it is as powerful for good as 
for evil, the evil however at present predominating. 

Let us, however, drop this mysterious mood, and proceed to 
deal with the point. First, then, for the dark side. 

We have again to return to the fact that a life premium is made 
up of two parts : one to meet the risk of death, the other for 
expenses and contingencies. The requirements which will be 
made in respect of the first part of the premium are capable of 
being determined with strict mathematical precision : the require- 
ments for expenses and contingencies cannot be so accurately 
determined. In a valuation for bonus the present value of the 
sums assured are set off against the present value of the premiums 
payable ; but the question of future expenses does not enter into 
the account, for the reason that it would have the effect of intro- 
ducing unknown against known values, and would therefore rather 
prevent the accuracy desired than assist in securing it. 

If then the liabilities in respect of the "loading" cannot be 



360 THE FORTUNATE TIME TO DIE. 

determined, and therefore cannot be charged in the debit side of 
the account, the only effect of introducing the value of loading as 
an asset is to understate the liabilities, and to overstate the 
assets, lending an artificial aspect of prosperity which even if not 
acted upon in the division of surplus, tends to mislead; or if 
acted upon necessarily to impoverish the funds of the Society. 
Mr. Sang takes up the argument at this point. He says : — 

" Let us keep this steadily in view, and we shall at once see that by setting 
the present value of the premiums due by the members against the present 
value of the sums assured to them, we estimate as present profit all that is yet 
to be realized during the currency of their policies ; and that a balance so 
struck does not exhibit the 'present state of the Society's affairs, but the whole 
profits prospectively to accrue from its current transactions. If then the free fund 
[surplus] so brought out be set out and distributed in any way, there will be 
left no prospect of further profit from the transactions of the present members, 
who are then put in the same position as if they paid only net value premiums. 
Were no new members to enter the Society, no further bonus could ever be 
declared ; and hence, if the present be to shave with the new ones in any future 
profit, that must go to deprive the new comers of any part of the surplus pay- 
ments. If valuations on this principle be accurately conducted, the new en- 
trants ought to divide exclusively the whole of any future bonus." And he adds, 
" It behoves, then, a person proposing to assure with such a Society, to 
inquire carefully as to the manner in which the valuation is conducted, since a 
very slight variation in that may seriously affect the interest of those whom 
he proposes to benefit by his transaction ; and he ought to look to this still 
more narrowly, if the present members be to share in the future profits, not 
merely in proportion to the sums originally assured to them, but in proportion 
to the previously declared bonus additions." 

If an Office proceeds to a distribution of such imaginary or 
prospective profits, it requires no great penetration to discern that 
a great injustice must be inflicted on the future members. It 
was the contemplation of such an occurrence as this that led the 
author of Life Assurance, its Schemes, etc., to exclaim, " Possibly 
the representatives of those few members who were so fortunate 
as to die during this halcyon period would reap the advantage 
of the unworthy trick which had been played : — 

' If 'twere then to die, 'twere then to be most happy.' 

while, on the other band, the representatives of those members 
who might unfortunately live some few years longer (thus contri- 
buting more largely to the Society's funds) might consider them- 
selves fortunate if they obtain from the wreck even the bare 
amount originally assured." 

But leaving altogether out of the question the injustice likely 
to result to the members from the " one-sided" mode of proceed- 
ing referred to, let us view it simply in relation to the correct 
principles of preparing a statement of assets and liabilities. It is 
the business of an actuary to reduce all fluctuating elements down 
to, and within the rules of average, or in other words of certainty. 
If he errs it should be on the safe side. Hence we hear of " cor- 
rections for fluctuations," and " adjustments," without end : and 



NUMBER OF LAPSED AND SURRENDERED POLICIES. 361 

they are known, in most cases, to be necessary. But where are 
the adjustments and corrections when the whole of the prospective 
profits are brought into the account as present assets ? The 
actuary who so prepares a valuation, knows full well that, while 
he is anticipating the profits upon all the existing policies up to 
the full extent of their possible currency, not more than one-half 
such policies will run on to maturity. We have already referred 
to the small proportion of the Equitable policies which were 
continued long enough in existence to become claims. But as 
this may be considered, and is, to some extent, an exceptional 
case, we will refer to a more modern instance. 

Let us take the first 500 policies issued by the Economic 
Office, and see what had become of them at the end of 30 years ; 
here are the figures : — 

Dead 149 

Purchased by the Office 118 



Term expired 28 

In existence 119 

500 

Now, assuming that all the 119 existing policies became claims 
by death — a circumstance not very probable, seeing that of the 
381 ceasing to exist in that period only 149 were discontinued 
by death — assuming, we say, this to be the case, only 268, or just 
over one-half of the entire number observed upon, will have 
emerged by death, " so that by taking credit for an annuity 
equal to the margin of the premiums for the whole of the life you 
take more than can possibly be realized." * These figures, it 
must be remembered, apply to an Office of the highest standing : 
in many Offices " want of confidence," it may be presumed, would 
add considerably to the lapsed and surrendered policies. It may 
be useful to note, that of the above policies, those which were 
determined by death existed on an average for fourteen years ; 
those extinguished by purchase, nine years ; those which lapsed, 
three years ; and the " term" assurances, five years. 

The process of valuation now under notice assumes that all the 
policies will be determined by death : whereas, certainly not 
more than one-half of the entire number, issued in any Office, 
speaking according to modern as well as earlier experience, will 
be so terminated. 

An instance of the results which can be produced by such a 
process of false valuation may be useful. The value of the rever- 
sion of £1,000,000 on the lives of persons aged 30, is £446,750. 
The net annual premiums to assure £1,000,000 on the same lives 
is £23,519. Assume that the premiums which the insurers have 
engaged to pay are " charged" to the extent of 25 per cent., and 
amount to £29,399, then the present value of these annual premi' 

* Vide evidence of Mr. J. J. Downes, before Select Committee, question 1106. 



362 THE FALLACIES THAT SOMETIMES LURK IN VALUATIONS. 

urns is £558,437. Allowing no deduction for expenses, the profits 
of the Office, which had granted the policies, are, by the said method 
£111,687, although it has received as actual premiums only £29,- 
399 ! * We do not want to say more. 

After this illustration we shall not have much difficulty in 
acknowledging that " in these valuations very great fallacies may 
sometimes lurk." 

That we are not dealing with an imaginary evil the following 
testimony will exemplify. 

In answer to the question, "Do you suppose that many Offices 
have divided bonuses upon a principle which the actuaries of other 
Offices would think unsafe ?" Mr. J. J. Downes thus replied : — 

" I have seen it stated in published reports, that a clear divisible surplus of 
so much remains, but I infer from the practice of the Office that they do not 
believe that to be the fact, because they state a divisible surplus to a large 
amount, and recommend a division to a smaller amount. Now, if the Office 
has an actual surplus, and declares it to be a surplus, they may safely divide 
it unless they give very good reasons for withholding a portion of it. If they 
give a sufficient reason for withholding a portion of such surplus, then I say in 
their judgment such a surplus does not exist, and ought not to be stated.'" 

The reader will at once perceive the force of this reasoning. 
All the circumstances of an Office being known to the actuary 
before or during the progress of valuation, any result which 
cannot be acted upon is merely fictitious and delusive. Applying 
the preceding remarks to his own Office (the Economic) , Mr. 
Downes continues — 

" If I were to make a valuation on that principle (valuing the gross pre- 
miums) I should show a surplus exceeding half a million of money in the 
hands of our Society, beyond the surplus actually realized ; and if I were to 
say ' There is half a million of money profit,' the members would say ' Let us 
divide it ; if you have that surplus what reason have you for not dividing it ? ' 
' Why, it is a surplus that may come ; supposing that you were in a condition 
to commute your premiums for the whole term of life into present assets, and 
to put the amount to your credit in the account, then we would have the 
further surplus of half a million to divide ; but until it is brought there such a 
surplus does not exist." \ 

The following writers all speak strongly upon the practice of 
placing the value of the gross premiums on one side of the account, 
with no corresponding deductions for the purposes of expenses 
and contingencies. On this point, indeed, there seem no two 
opinions : — 

Mr. Charles Ansell points out that (as shown in the illustration 
just given) it is optional with those who make the assurances to 
continue their premiums or not as they may think fit, adding : — ■ 
" And in the meantime you have estimated the profit attributable 
to each premium as an element of your financial or pecuniary 
position, and assume that the Institution will certainly receive it 

* Vide English Life Table, No. 2, and Dr. Farr's Letter in his twelfth Annnal Report of 
Registrar-General. 
1 Question 1,123*. 



THE GROSS PREMIUMS QUESTION. 363 

until the time the life shall die, and if the party should drop the 
policy, then you lose a portion of that which you have set down 
as profit, and it is not really available, although you have assumed 
it to be so." 

Mr. J. J. Downes expresses similar views almost in the same 
words. When interrogated, " In what way would you value the 
future premiums payable to the Office as assets for existing liabil- 
ities ; would you take the gross amount payable, or a portion of 
it?" he replied, "I should take only that portion of it supposed 
to be applicable to the risk, leaving a margin to pay future ex- 
penses." And, again: "Then you would not take credit in 
your balance-sheet for the whole amount of premiums payable to 
the Office ?" his reply being, " No, that would be very erroneous^ 
because the whole amount payable under the contracts may never 
be received ; you are not sure of any portion of it beyond that 
which you have already received." He afterwards supports this 
view by the following case. " Say I received from A B £40, £10 
of which is supposed to be profit for expenses ; the whole is worth 
15 years' purchase, and 15 years' purchase of the £10 per annum 
for expenses is worth £150 : the policy at the end of the year, on 
the principle I have given, is worth half the premium which has 
been paid, say £20 on the one side, then I have £20 of liability on 
the other, and for £150 of profit I lose my liability of £20 on the 
other side. I am relieved from that, but I gain a loss of £150 on 
the other; the Society would therefore be by £130 in worse posi- 
tion than it was before the lapse of the policy, on such an estimate 
of its position." 

Mr. Higham again follows on the same side. Speaking of valu- 
ing the gross premiums he says, " The sum assured is valued and 
put on one side of the account : the claim of the Company to 
receive premiums is valued and put on the other side of the 
account, and the latter is made out to be larger than the former: 
consequently, as I said before, a policy which the Company would 
pay money to cancel, appears in their balance-sheet as a valuable 
asset ; that is to say, the same document is a valuable property 
to the grantor and grantee." He also calls an example to his 
aid : — Allow me to suppose the case of a Bank, making up its 
accounts: it owes to its depositors £1,000,000. It has in hand 
£900,000 ; it puts down an additional item of assets, profits, we 
will say at the rate of £1 0,000 a-year, valued at 20 years' purchase : 
by that means it makes its assets £1,100,000 against £1,000,000 
of liabilities, and the result is stated to be a surplus of £100,000. 
That prificiple would never be adopted in a JBank, and I think it 
ought not to be adopted in an Assurance Company?'' 

Mr. W. T. Thomson takes up the matter in rather a different 
light. " I object (he says) very decidedly to the valuation and 
exhibition in the balance-sheet, of the difference between the net 
and gross premiums ; I think the Actuary of each Office should 
know precisely what the value of the difference is ; but I object 



364 WHAT ME. DOVE DID IN KESPECT OF THE 

to its being shown or introduced in the balance-sheet, as calcu- 
lated to mislead, and to induce policy-holders, Directors, and others 
to press for its division, while it should be reserved entire." 

Mr. S. Ingall is still stronger upon the point. " In my opinion, 
next to an improvident expenditure, it is the most dangerous prac- 
tice that can be resorted to in an Assurance Company ; and is 
generally adopted in offices where there is a deficiency of assets." 

Mr. T. R. Edmonds mildly says, while speaking of the correct 
principles of valuation, " The additions to the premiums are dis- 
regarded : the net premiums alone are valued." 

An able writer in the Assurance Magazine says the loading 
<c will clearly be required in every year to come, as much as in 
those which have passed, and therefore must be carefully set aside 
for the purposes in question." 

Dr. Farr does not enter very fully into the discussion. He says, 
" It is urged by one class of actuaries, that the ' charge ' should 
not be brought into account ; and what I have said hitherto is in 
accordance with that view." 

Mr. Sang again says, " Now, were we to proceed incautiously, 
and estimate the present value of the gross premiums due, it is 
quite clear that we would be accounting as present property, the 
value of a fund yet to be realised. To avoid including this in our 
estimate, we must take not the gross premium, but the net pre- 
??iium that would have resulted from the best known law of mor- 
tality." 

Mr. Percy M. Dove, in publishing the results of a valuation in 
his Office, took the precaution, and we think wisely as the times 
go, of announcing as follows : " The future premiums in existing 
policies have not been computed at the full amount payable by 
the assured, but at the lesser amount found by deducting from 
each the ' loading'' or addition made for expenses and profit. By 
this method the sources of profits are entirely disunited from con- 
sideration in the demonstrations, and we deal solely and exclu- 
sively with the profit made within the period of investigation." 
Other Managers will do well to follow this example. 

Now, after all that has been said against the introduction of the 
loading into valuations, it may be startling for us to assert that 
no valuation can ever be considered complete which does not in- 
clude the value of the loading. Yet such is really the case, with, 
however, this important proviso, that it should appear on both 
sides of the account. 

We are not claiming credit for originating this view of the 
case. It has long since had its able supporters, and amongst 
these, actuaries who, by reason of the position they occupy, may 
be ranked at the head of their profession. The editors of the 
Assurance Magazine (vol. iii., p. 292-3) put this unanswerable 
case : — 

" Let us suppose a Company to be in the receipt of an income from premiums 
of £100,000 per annum, and that its business was commenced with rates sup- 



WHAT MR. JELLICOE THINKS ABOUT GROSS PREMIUMS. 365 

posed to be equal in every case to the risk, a marginal addition [loading] of 
25 per cent, being made to them throughout. The portion of income required 
in such case for the sums assured merely would hence be £80,000, and the re- 
maining £20,000 per annum would be the provision for extra contingencies. 
Let us now imagine (they continue) an investigation to be made as to the real 
rate of mortality prevailing, and that it be found that in lieu of the rate origi- 
nally assured being borne out, a certain increased one is proved to obtain, the 
premiums based upon which would make it necessary to devote £90,000 instead 
of £80,000 per annum to meet the risks; the surplus income being thus 
reduced to £10,000 per annum only, instead of £20,000. Now as the change 
in the rate of premium consequent upon that in the rate of mortality, is not 
immediately apparent, this reduction in the surplus income is not unlikely to 
escape observation, where the net premiums alone are valued, and matters in 
this way might be allowed to go on as if no such reduction had taken place — 
a state of things impossible to be where the same, or nearly the same, propor- 
tion of the value of the net premiums is always retained. In short, it cannot 
be too carefully borne in mind that the only means we have in this business 
of judging as to the future must be derived from a vigilant observation of 
what has taken place in circumstances as nearly as possible of a similar cha- 
racter, and that thus it behoves us to make, from time to time, investigations 
with this object, and to effect such changes in the provision for future liabili- 
ties as may thereupon be found necessary We thus virtually exer- 
cise a power of raising or depressing the future premiums, as the necessities 
of the case may demand ; or what is the same thing, we increase or diminish 
the returns of surplus in obedience to the dictates of our experience,, and in 
accordance with the law which regulates, fulfilling in this way, and obviously 
in the proper manner, the very objects with which the marginal additions 
were originally made." 

We most entirely agree with all the authorities quoted in 
deprecating the system of valuing the gross premiums as a set off 
against the net liabilities. No writer, so far as we are aware, 
has ever justified such a course, although it has been too fre- 
quently acted upon. The point we urge is that a sum so impor- 
tant for good or evil as the value of the loading, should not be 
left entirely out of the account. 

So far, indeed, from this plan being objectionable on the score 
of abuses, we believe the very opposite effect would be produced. 
The introducing of this item into the account would be a means 
of testing whether it had already been trespassed upon in the 
present or any previous valuations. Mr. Jellicoe thinks it "quite 
right to take the value of the gross premiums, and to deduct from 
them a portion for the purpose of forming from that a guarantee 
or surplus fund," which he afterwards designates " a contrivance 
to preserve the same margin nearly, whatever the fluctuation in 
the risk of premium may be" — as, in fact, detailed in the plan laid 
down by the editors of the Assurance Magazine, of whom he is 
one, and so far we go entirely with him. 

There is another strong reason in support of this view. Take 
the case of two Offices, one charging high rates of premium ; the 
other, low rates — such indeed as might be derived from the Eng- 
lish Table No. 2 — in the one case the net rates being loaded 40 
per cent. : in the other case only twenty. Now if the valuation 
were confined to the net rates only, the position of the two Offices 
would appear equal (if their businesses had been equal), whereas 



366 THE DUTIES OF ACTUARIES. 

the actual resources of the high rate Office must, under equally- 
sound management, be infinitely greater than those of the low rate 
one. 

Lastly, we may ask, if the loading be not distinctly set forth 
in the items of valuation, what guarantee is there sufficiently pal- 
pable for public guidance, that where it is intended to " make 
things pleasant," regardless of the after consequences, the loading 
will not be included on the asset side of the account without the 
fact being notified ? 

In the conduct of an actuarial investigation there should be no 
swerving to the right nor to the left. Here, as Professor de Mor- 
gan declares, "it is truth and not security that is the object." 
There should be no speculation in such matters : all should con- 
form to the strict laws of certainty. Mr. Morgan set us a noble 
example in the great Equitable Society : we shall do well to fol- 
low it. Addressing the members in 1793, he said, "It is, I be- 
lieve, the only Society that has been uniformly guided in its prac- 
tice by calculation ; and the success and credit which it has at- 
tained sufficiently prove the wisdom of this conduct." To which 
we devoutly say Amen, 

Mr. E. J. Farren has remarked that "it must be an obvious 
strain upon the Actuary's firmness to be aware that in making up 
his accounts for the next valuation, if he does not declare a very 
large bonus, the business of the Office will fall off;" and, he adds, 
"A man who does not know thoroughly all about the subject 
must be in a very awkward position." An Actuary who does not 
well consider all the points we have noted, and many others which 
can claim no space in a simply popular treatise, will in all proba- 
bility, sooner or later, lead any Company he may be connected 
with into considerable, if not irretrievable difficulties. 



DIVISION V. 



LIFE ASSURANCE AS AN INVESTMENT, INCLUDING THE PUR- 
CHASE OF LIFE POLICIES, AND SPECULATIONS IN INSURANCE 
• SHARES. 

The preceding chapters od bonuses will have prepared our 
readers to look upon Life Assurance with some regard to its 
claims as a profitable investment. Their primary object, indeed, 
has been to consider the sources of profit with regard to its equi- 
table distribution amongst the policy-holders. Still a careful con- 
sideration of the points there discussed, would have constituted a 
desirable introduction to the question we are now approaching. 
The purpose of the folloioing chapters then will be to show that 
Life Assurance — apart from all other considerations — offers de- 
cided advantages as a means of investment / a view in support of 
which we shall adduce abundant testimony. 

In order to furnish some more definite idea of the advantageous 
results which Life Assurance is capable of affording, than is 
generally conveyed by merely dry statements of facts, we pur- 
pose to append to the following chapter some illustrations of the 
practical working of Interest : to which source, as we have al- 
ready explained, much that at first sight appears unaccountable 
in matters connected with Investments is traceable. We shall 
also include in this division a short chapter on the purchase of 
life policies, a point on which more general information is much 
required ; and, finally, a chapter on Insurance Shares as a medium 
of investment. 

There is yet one other point to be kept constantly in view, 
while speaking of Life Assurance in the light of an Investment ; 
and that is the certainty of the issue. The uncertainty of human 
life may constitute a barrier to all other speculations. In Life As- 
surance this is one of the main elements taken into account. On 
this point Mr. Babbage has well said : 

" The whole object of Assurances is to render certain that which nature has 
made uncertain. A person in health and employment knows that if he lives 
a few years he will be able to leave at his death a competency for his family ; 
but he knows also that from the uncertainty of life he may be cut off in a 
year, in a month, and leave his family unprovided for : thus situated, he has 
recourse to an Assurance on his life, and he is now certain of leaving a pro- 
vision for his family." 

With this view steadily before us we may proceed. 



CHAPTER I. 

LIFE ASSURANCE AS AN INVESTMENT. 

The great Dr. Franklin, amongst the many wise things he said 
and did, pronounced " a policy of Life Assurance " to be " the 
cheapest and safest mode of making a certain provision for one's 
family." Assuming then that all persons of sound mind and 
ordinary education are desirous of making some provision for 
those dependent upon them, to guard against their being render- 
ed destitute, or thrown upon the bounty of strangers, we purpose 
to devote a few pages, in which to demonstrate that Dr. Franklin's 
view of Life Assurance is the correct one ; and also to show, that 
even those who have no family or friends to provide for, may find 
in Life Assurance a safe and profitable means of investment. 

Formerly persons looked upon Life Assurance as a scheme for 
taxing their purses, or curtailing their present enjoyments, without 
much prospect of any certain or adequate return. If such an as- 
sumption were ever true, which we by no means admit, it cer- 
tainly can lay no claim to verity in the present improved state 
of the science. 

It will not create surprise if we take occasion to remark thus 
early in the inquiry that, whether the object of the person assur- 
ing be the all-important one of making a provision for his family, 
or whether it be simply with a view to the profitable investment 
of money, the same sagacity and caution which are employed by 
business people in ordinary transactions should be brought to 
bear upon matters of Life Assurance, otherwise disappointment 
and loss may be the result. Life Assurance indeed being " a con- 
tract based upon confidence," the fulfilment of its object extend- 
ing to remote periods, most frequently terminating only with the 
chief party to the contract, even more than usual caution should 
be exercised. Because Life Assurance is in itself good, and its 
adoption in most instances praiseworthy, it by no means follows, 
that all the channels to its accomplishment are either good, praise- 
worthy, or even trustworthy; the contrary is, indeed, too fre- 
quently shown to be the case. It must, therefore, be understood 
that the advantages we are about to explain may only be expect- 
ed to accrue to those who seek membership in sound and respec- 
table Offices, be they young or old. 

To prevent the necessity of entering further upon these points 
here, a chapter has been prepared under the title of " Guide to 
the Selection of an Assurance Office," which the reader may con- 
sult with advantage before attempting to enter upon Life Assu- 
rance as an investment. We will only therefore add, that there 
are now existing numerous Offices, both old and young, that ap- 



LIFE INSURANCE A LOTTERY REVERSED. 369 

pear capable of giving all the advantages which we shall lead the 
reader to expect in the progress of this chapter, while unfortu- 
nately also, there are some which should be avoided as we avoid 
a pestilence or a famine. 

It has been the custom with most writers to dwell upon Life 
Assurance as a great moral duty, or, if they have entered upon 
its advantages, it has been rather in a national than in an indivi- 
dual light. This we fancy to be, for all practical purposes, a 
mistake. However much we may deplore the fact, we may still 
speak of it as a, fact, that comparatively few people pay much re- 
gard to what is simply their duty, unless they have some personal 
object in view in addition. Acting upon this view in an insu- 
rance career extending over some years, we have always endea- 
vored to show those with whom we came in contact, that it was 
their interest to assure, and we have very rarely missed our mark. 
It is in accordance with the spirit of the present age, particularly 
with mercantile people, to ask, " Will it pat ?" We hope we may 
convince our readers, and that they again may convince their 
friends, that it will. So now to our task. 

While many of the writers before referred to have failed to take 
the ground we have now assumed, most of them have expressed 
views in support of the profitable character of assurance invest- 
ments, and we are desirous of strengthening our position by some 
reference to these opinions. 

Dr. Farr, who writes upon Life Assurance simply with a view 
to the improvement of the science, and the rendering of it more 
generally applicable, says, " Probably if the following question 
were put to those whose lives are now insured — what is the ad- 
vantage which you derive from investing your surplus income in 
an Assurance Office ? more than one-half would reply — The cer- 
tainty of my executors receiving a sum at my death, were that to 
take place to-morrow. This," he adds, " is but half an answer ; 
for not only does the Office undertake the equalization of life, as 
above described, but also the return of the sums invested with com- 
pound interest'''' He then proceeds to the development of the idea 
which constitutes the argument of the present chapter: — 

" A Life Assurance Office is a bank, in which deposits are made every year, 
to be withdrawn at the death of the depositor ; it is a lottery reversed, as for 
unequal sums it sells equal prizes ; it is a trading firm, in some cases seeking 
customers every year, and always seeking customers ; it is a Company of capi- 
talists, constantly looking out for long investments, and well organized, to 
deal profitably in securities at some greater risk than those returning 3 per 
cent, interest." 

Vide 12th Report of Megistrar-General 

Professor de Morgan says no one can form an accurate idea of 
an Assurance Office " who does not consider it as a Savings Bank 
yielding interest, and interest upon interest ;" adding, " This is a 
reason why an Office which charges for its insurance more than it 
is worth, as an insurance, may nevertheless place its contributors 



370 LIFE ASSURANCE AS AN INVESTMENT. 

in a better position than they would have held if there had been 
no such Institution." 
He then proceeds : — 

" To make this clear, let us consider the working of a simple Investment 
Office. A large number of individuals subscribe a sum, which they intrust to 
an individual or a Company to employ, yielding them the return at some fix- 
ed but distant period. Let each share be £100. The best thing which an indi- 
vidual could do with such a small sum, so as to have perfect security for its return, 
would be to invest it in the funds at 3£ (now 3£) per cent. He might also in- 
vest the interest, and thus obtain compound interest ; but it is not easy for an 
individual to do this. Unless he provide an agent to draw the dividends im- 
mediately on their becoming due, various circumstances will happen to pre- 
vent the immediate investment of the interest. It is not at all an unfair cal- 
culation to suppose, that upon each half-yearly dividend a month will be lost, 
so that nominal compound interest for 42 years will only be really for 35 
years. A single pound, therefore, laid up by a man aged 20, and improved 
for the average term of his life at 3£ per cent., would only become £3 6s. Sd. ; 
while in the hands of a person who lost no time, it would become £4 5s. , or 
nearly £1 more. On t'ie other hand, a Company, or a skilful individual who 
can command large smrs of money, can always make the best interest which 
the market will afford.' 

He adds : — 

" The funds, from the security of their tenure, and the conveniences which 
they offer, will always, in ordinary times, represent the lowest rate of interest 
which money will yield. Other investments, which offer better interest, are 
generally only accessible to those who can command considerable sums, and 
are frequently attended with risk ; so that it requires knowledge to distin- 
guish between the sound and the unsound. A Company employing the whole 
time of a person or persons skilled in money matters, and having continual 
large investments to make, can realise not only more interest, but so much 
more that there still remains a surplus worth considering after the skill em- 
ployed has been paid for. It is not assuming too much to say that, all ex- 
penses paid, they command 3£ per cent, compound interest. More than this, 
they can obtain such interest without any delay in investing the interest. . . 
Hence £1 improved during the average life of an individual, aged 20, will be- 
come £4 5s." 

Mr. Chaplin, the London Secretary of the Edinburgh Life 
Office, speaks of Life Assurance as " notoriously the best invest- 
ment " that can be made. Adding, " No other can be made 
combining so well the two great requisites, security and profit. 
In all the vicissitudes of politics and trade, in times of wild spec- 
ulation and of disastrous panic, in the plethora of peace and the 
exhaustion of war, Life Assurance investments have been uniform- 
ly safe and profitable. Of what other kind of investment," he 
asks, " can the same thing be said ?" 

An able writer in the Morning Herald, during the period of the 
" Assurance Controversy," offered some sound observations on the 
elements of security in a Life Office. " Losses of any magnitude 
are indeed rare among the Life Offices, because their charges and 
liabilities are, or ought to be, in proportion to the extent of their 
business ; and the law of mortality on which their premiums are 
based is an acknowledged, an established law. . . . For these 
reasons no crash ever did, or ever can happen among the Life 



LIFE ASSURANCE AS AN INVESTMENT. 3*71 

Offices from any other cause, or causes, than evil or ignorant 
management, or an unforeseen and disastrous convulsion of the 
money world, to which all business associations of every kind 
and character are alike subject. The Life Offices in good hands 
are, therefore, by their constitution and their objects, no less than 
by the fact that all premiums are paid in advance, almost wholly 
secured from the hazards of mere adventure or mere enter 
prise." 

The author of that clever publication — Why is not Life Assu- 
rance universal? says: — 

" Whether regarded as a speculation, as an investment, or as a reversion, 
there is nothing which offers such a profitable and accumulative return for 
even small sums of money as a Life Assurance Office." 

Another equally able writer says : — 

" Not only is Insurance the means of guarding against a contingency, but 
still further, if the Office is a good one it is, probably, the best investment that 
can be chosen by a prudent man, provided that he does not over assure, and so 
run the risk of being obliged, at some future time, to relinquish his policy. We 
say this advisedly, and even supposing a man had the certainty of living to an 
advanced age ; for the excess of premium that he will have paid will be more 
than counterbalanced by the additions to his policy by way of bonus. This 
may be proved by past experience, as, indeed, it has been already done by Mr. 
De Morgan in his work upon the subject. Everything, however, will depend 
upon the Office"* 

We need proceed no further with authorities in support of the 
advantageous nature of Life Assurance as an investment, because 
we shall presently give tabular results drawn from actual experi- 
ence ; but one difficulty we have to meet at this point in an 
objection which is too often well founded — namely, that that 
which is most advantageous is very frequently most insecure. 
Now can this objection be fairly applied to Life Assurance invest- 
ments ? We think not ; and have we not good grounds on which 
to base our opinions ? 

"There is nothing in the commercial world which ap- 
proaches EVEN REMOTELY THE SECURITY OF A WELL-ESTABLISHED 

Life Office." — Professor de Morgan. 

To make the point yet more clear, he adds, " the certainty is the 
thing contracted for. Trade and speculation might have realised 
greater profits : trade and specidation might have realised ruin /" 
What testimony can be stronger ! 

Mr. Finlaison illustrates this certainty in another way. " The 
basis of all questions having reference to the failure or continu- 
ance of life is well-known to be a law of mortality, or the probabi- 
lity that a human being who may be in any given year of age 
will die in that same year. If this be accurately determined for 
each and every single year in the natural life of mankind, all other 
questions whatsoever of a financial nature are capable of precis^ 

* Life Assurance Offices, New and Speculative. 



372 SECURITY OF LIFE ASSURANCE. 

solution being merely so many arithmetical results." This cer- 
tainty we have already seen fully established. 

Mr. Soper takes a strictly mercantile view of the case, and 
declares " There are no grounds for apprehending, under any 
possible circumstances, a crash amongst the Life Offices, as amongst 
railroads or other speculative undertakings : for (he adds) the 
business investments of Life Offices do not partake of a speculative 
character. Even a panic in the money world, which brings des- 
truction upon other interests, must benefit the Life Offices, by 
raising the value of money, which is their only stock in trade." 
This confirms the views already expressed in our chapter on 
interest. 

And, lastly, we are told that so expansive as well as secure is 
the principle of Life Assurance, that " there is not a position or 
circumstance in life in regard to monetary affairs, in which its 
principles are not applicable." 

Let us, then, consider the security of Life Assurance investments 
as a principle settled, and return to their advantages. Here we 
have to reiterate "everything depends upon the Office." The 
proudest barque that ever skimmed the seas is rendered powerless 
from the moment she touches upon the quicksands. The shoals 
and quicksands of Life Assurance too often lie near the surface, 
and are only glossed over by the shallow water of " pretended 
advantages." These should be carefully guarded against by all 
persons who seek Life Assurance either as an Investment in the 
ordinary sense of the term, or as a simple provision for their fami- 
lies. It is a proud thing to be said of Life Assurance that no 
instance can be adduced of an established Office failing to meet 
its engagements to the day, the hour, and the pound, but it is 
nevertheless true ; and no substantial advantages can come out of 
any other mode of procedure. Those, then, who seek for profi- 
table Life Assurance investments must seek Offices suitable to 
their objects. 

It does not require either argument or illustration to establish 
the fact, that if a person dies before the premiums he has paid, 
improved at the current rate of interest, amount to the sum he is 
entitled to receive under his policy, the investment to him must 
have been a good one. We must, therefore, extend our illustra- 
tions to the case of persons who live the average duration of life ; 
and who is there that does not individually expect to do this ? 

One of the most usual arguments with persons who object to 
assure is that they can make better use of their money, therefore 
our examples may also be framed to meet this objection. The 
plan to pursue, in such a case, is to assume the same person to 
commence at the same period of life, two kinds of investment, one 
by means of Life Assurance, the other by any other mode he may 
select — the same annual sum being applied to each. 

Mr. Charles Babbage, some years since, applied this very test, 
taking for the basis of his assurance investment the rates and 



MR. BABBAGE'S ILLUSTRATED TABLE. 



373 



bonuses of the Equitable. Here is the Table of the results, which 
should be read carefully : — 





A person laying out 


A person laying out 


A person laying out 


A person laying out 


A person, aged 25, paying ,£100 


£100 per annum, 


£100 per annum, 


£100 per annum, 


£100 per annum, 


per annum premium, 


at 3 per cent., for 


at 4 per cent., for 


at 5 per cent., for 


at 6 per cent., for 


assures £4,160, which becomes 


any of the same 


any of the same 


any of the same 


any of the same 


with bonus additions in 


number of years 


number of years 


number of years 


number of years 




will have 


will have 


will have 


will have 


£ 


£ 


£ 


£ 


£ 


10 years 5,096 


1,146 


1,201 


1,257 


1,313 


15 " 6,032 


1,860 


2,002 


2,158 


2,328 


20 " 7,072 


2,687 


2,978 


3,307 


3,679 


25 " 8,525 


3,646 


4,165 


4,773 


5,486 


30 " 10,400 


4,757 


5,608 


6,644 


7,906 


35 " 12,688 


6,046 


7,365 


9,032 


11,143 


40 " 15,246 


7,540 


9,503 


12,080 


15,476 


45 " 18,045 


9,272 


12,103 


15,970 


21,274 


50 " 20,862 


11,280 


15,267 


20,935 


29,034 



Now, this Table shows, that a person aged 25 investing £100 
per annum, in the Equitable Office, and £100 per annum in any- 
other kind of investment, must live to the age of 75 and realise 5 
per cent interest on his investments during a period oi fifty years, 
without the loss of a shilling of the principal, in order to make 
the latter equal the former — the average duration of life after 
that age being only 40 years ! But if only/bwr per "cent, be re- 
alised, which would be considered a handsome average over such 
a period of years, the Life Assurance investment would be better 
than the other by one-fourth ! At 3 per cent., or at ages nearer to 
the average duration of life, the comparison becomes ridiculous! 

Mr. Babbage remarks upon the results of the Table : — 

" If the interest on money were 4 per cent., a person aged 25 must live 
about 65 years, or reach the age of 90 before he will have paid to the Office a 
sum equal to that which he is to receive at his death. If money can be im- 
proved at 5 per cent, he must live nearly fifty years, and even at 6 per cent, 
he must live almost 40 years before the accumulations from his annual pre- 
miums amount to the sum he receives at his death. Now, according to the 
Carlisle Tables, it is an even chance that a man aged 25 will live 40 years 
and the experience of the Equitable Society gives nearly the same result." 

Speaking of the additions which have been made to the Equita- 
ble policies, Mr. Morgan, in his address in 1795, said : — 

"I know of no claim in which the addition to it has not far exceeded any 
profit which the Society could possibly have derived from the assurance while it 
existed. Nor (he adds) are there many instances of the older policies in which 
the Society, in consequence of the additions made to them, would not now pay 
nearly as much, if not more, for the present value of those assurances, than the 
amount of all the annual premiums which have ever been received upon them; 
together with the accumulations of compound interest added to those per- 
miums." 

He then furnishes an instance : — 



374 PECUNIARY ADVANTAGES OF LIFE ASSURANCE. 

" Suppose a life of 35 to have "been assured in the year 1769, in the sum of 
£1,000 at the annual premium of £30. In the course of thirty-one years, the 
sum, being laid out annually to be improved at the same rate of interest at 
which the premiums are computed, would now have accumulated to £1,500. 
If, however, this policy were now surrendered, the sum of £1,527 would be 
paid for the value of it ; so that the person will have been assured thirty-one 
years in the sum of £1,000 (exclusive of the addition) not only without any 
expense, but even with the advantage of receiving £27 as a gratuity at the end 
of the term. Were no further additions, therefore, to be ever made to the 
assurances, the older members, at least, would have the greatest reason to be 
satisfied with those benefits which they already enjoy, and which must have 
exceeded their highest hopes and expectations." 

As, however, the enormous bonuses of the Equitable, upon 
which the preceding illustrations are based, have passed away, 
and no other Assurance Society is ever likely to realise precisely 
similar results, we will furnish an example better adapted to the 
present time. Let us take the case of two persons in humble life, 
who can each spare £5 per annum for purposes of investment, 
and resolve to do so ; the one adopting the principle that " unity 
is strength " and joining an Assurance Office — the other taking 
his chance as an individual investor. The latter, we shall as- 
sume, realises a uniform rate of 4 per cent, compound interest ; 
the former, we shall suppose, joins an Office founded on the Car- 
lisle Table of Mortality, charging for a participating assurance at 
age 30, £2 10s. per cent, and giving bonus returns equivalent to 
1% per annum upon the sum assured, and the progressive additions 
thereto : results within the reach of successfully conducted As- 
surance Offices, and such as are now being realised by many re- 
spectable Offices. Let us commend the Table to the careful con- 
sideration of the reader : — 

The following explanation will assist in the understanding of 
the table. The first column gives the progressive ages of the 
parties. The second the number of years the Assurance and the 
investment have been on foot. The third, progressive bonus ac- 
cumulations on the life policy — no additions being usually made 
in the event of death within the first five years, none are here 
added until the expiration of that term. The fourth column gives 
the progressive accumulations of the investment with interest and 
compound interest ; and the last column shows the difference in 
favor of Life Assurance at any period of the transaction, or vice 
versa, as is the case in the last year or two. The Life Assurance 
premium is supposed to be (as is customary) paid one year in 
advance, namely, on each birth-day, and the £5 in the fourth 
column invested at the same time. These payments in advance 
will account for the difference in the arrangement of the figures 
in the first and second column. 



COMPARATIVE TABLE. 



375 



TABLE 

Showing the result of Assurance against other Investments. 



Age of 

Assurer 

and 


Age of 

Life Policy 

and 


Amount of Assurance 

Policy and its Progressive 

Accumulations from 


Amount of Investment 

with Compound 
Interest accumulated at 


Difference in favor of Life 
Aasurance over other 


Investor. 


Investment, 


Bonuses. 


4 per cent. 








£ s. d. 


£ s. d. 


£ s. d. 


30 


1 


200 


5 


195 


31 


2 


200 


10 4 


189 16 


32 


3 


200 


15 12 2 


184 7 10 


33 


4 


200 


21 4 8 


178 15 4 


34 


5 


200 


27 1 8 


172 18 4 


35 


6 


215 


33 3 4 


181 16 8 


36 


7 


218 4 6 


39 10 0i 


178 14 5i 


37 


8 


221 9 


46 1 7i 


175 7 4J- 


38 


9 


224 13 6 


52 18 6 


171 15 


39 


10 


227 18 


60 10 


167 17 2 


40 


11 


231 2 6 


67 8 10i 


163 13 7£ 


41 


12 


234 11 9 


75 2 9i 


159 8 Hi 


42 


13 


238 1 


83 2 11 


154 18 1 


43 


14 


241 10 3 


91 9 5 


150 10 


44 


15 


244 19 6 


100 2 7i 


144 16 10i 


45 


16 


248 8 9 


109 2 9 


139 6 


46 


17 


252 3 1 


118 10 0£ 


133 13 01 


47 


18 


255 17 5 


128 4 10 


127 12 7 


48 


19 


259 11 9 


138 7 5 


121 4 4 


49 


20 


263 6 1 


148 18 U 


114 7 Hi 


50 


21 


267 5 


159 17 3 


107 3 2 


51 


22 


271 2 


171 5 2 


99 15 


52 


23 


274 19 11 


183 2 2 


91 17 9 


53 


24 


278 19 8 


195 8 n 


83 10 10i 


54 


25 


282 19 5 


208 5 2 


74 14 3 


55 


26 


286 19 2 


221 11 9* 


65 7 4£ 


56 


27 


291 5 


235 9 0* 


55 15 Hi 


57 


28 


295 10 10 


247 17 5 


47 13 5 


58 


29 


299 16 8 


264 17 4 


34 19 4 


59 


30 


304 2 6 


280 9 3 


23 13 3 


60 


31 


308 8 4 


296 13 8 


11 14 8 


61 


32 


313 9 


313 11 0£ 


10 Si] | 


62 


33 


317 14 9 


326 1 10 


8 7 1 1 | 


63 


34 


322 10 


339 2 8£ 


16 12 8i f * 


64 


35 


327 6 6 


352 14 0i 


25 7 6iJ'l 



The main points of comparison are, that for the first 31 years 
A (the assurer) has a manifest advantage over B (the investor). 
This advantage, it is perfectly true, gradually decreases as years 
roll on, until the parties respectively arrive at the age of 61, when 
their positions are equal; and, from that time, the advantage 
turns in favor of B. But look back a little and consult the mor- 
tality tables. The Carlisle Table, upon which the comparison is 
founded, says that at age 30 the future expectation of life is 34 
years ! What, then, is the greatest possible advantage B can 
derive over A ? It is that, for three years — at the close of life — 
he may make by his investment a sum ranging from £8 to ,£25 : 
while during the 31 previous years he has constantly been ex- 



376 EXPLANATION OF A LIFE ASSURANCE INVESTMENT. 

posed to the chance of losing sums varying from £12 up to £195, 
as compared with A's investment over his own ! Contrast the 
position of the two families. That of A is certain of a sum never 
less than £200 from the day the first payment is made. B must 
continue his investment for 24 years to entitle his family to such 
a sum ; and, even at that period, he will be £80 behind A, being 
the amount of the. bonus accumulations. We unhesitatingly 
affirm that at no point of the comparison can the position of B be 
defended. Can the forlorn prospect of a three years' temporary 
gain be contrasted with the blighting prospect of 31 years' 
serious loss ? Can any consideration justify leaving in a state of 
doubt and uncertainty that which, for the same cost and far less 
trouble, may be rendered fixed and certain ? Let the voices of 
ten thousand destitute widows and orphans emphatically answer 
—No! 

Even if it could be shown that a man investing his own funds 
might receive such a rate of interest as to make his position much 
more equal with those who adopt Life Assurance, there would 
remain other grave objections. 

" The difficulties which encompass the resolution to make annual savings 
and interest accumulations, and the temptations to encroach upon funds set 
apart for what is too often looked upon as a distant event, are so great that 
little reliance can be placed on the benevolent design. In the second place, 
owing to the uncertainty of life, the anxiety of the father or husband is con- 
tinued during the whole process of accumulation ; for the object for which his 
soul yearns — the welfare and comfort of his family — cannot be attained by in- 
dividual accumulations until the lapse of many years ; and, in the third place, 
such individual projects are mere speculations upon the continuance of an in- 
dividual life than which nothing can be more uncertain. How different is 
the position of the person who joins a Life Assurance Society — his annual 
saving becomes a portion of a general fund sufficient at all times to realise the 
intentions of every contributor. At the moment he makes his first contribu- 
tion his object is attained. His payment of £30 thus represents £1000 ; and 
should he die immediately after the payment of the first premium, his widow 
and children will receive that sum."* 

Mr. J. Baxter Langley, in his useful Vade Mecum, speaks well 
upon this point : — 

" i" can make better use of my money is the expression of the man who 
believes that saving is better than insuring. Persons using this objection 
believe that they can insure themselves, which has been shown to be impos- 
sible. These objectors may be fairly compared to him who 'enlarged his 
barns and built greater, forgetting that it might be said to him, Thou fool! 
this night thy soul shall be required of thee' They forget that they are not 
immortal, and seem unconscious of the danger to them of any of ' the thou- 
sand ills that flesh is heir to.' To be successful in saving, a long continuance 
of life is necessary — to Insurance it is not so." 

We think we have established beyond all question the claims 
of Life Assurance as an Investment. If we require to strengthen 
the suppositions upon which our Table is founded, we can do so 
in an infinite variety of ways. It may be worth while to refer 
the reader back to page 162, where out of 5,642 persons shown 

* Defects in the Practice of Life Assurance— a pamphlet. 



EFFECT OF INTEREST ON INVESTMENTS. 377 

to be alive by the Carlisle Table at age 30, but 3,520 are alive at 
age 61, and but 3,143 at age 64. Who is to calculate that he 
will not be one of the 2,122 who die during the first 31 years, or 
one of the 377 who die during the last 3 years ? The only instan- 
ces in which there is even a chance of a person losing by Life 
Assurance is, where life is prolonged considerably beyond the 
average ; or, as another writer has expressed it, " unless he be 
haunted with the fear of living so long as to have to pay an abso- 
lutely greater sum in premiums than the amount of his policy. 
In that case we may say with Hamlet — 

' There's the respect 
That makes calamity of so long life.' 

Yet (continues the writer) we venture to think that few persons 
are so completely sordid as to regret the prolongation of life, 
because it condemns them to make a bad bargain." 

We have one word of explanation to add at this point. For 
most of our examples and comparisons throughout this work the 
age of 30 has been selected. Our reason for selecting that age is 
that we believe it to be about the average age at which lives are 
now assured in this country. At the commencement of this cen- 
tury Mr. Babbage found the average age to be 47. Some few 
years since Dr. Farr stated the average to be 35. Each year, 
happily, the average has been in favor of the younger ages : we 
take the present average, therefore, at 30. 

Let us hope that Agents will now be armed by arguments to 
combat all the foolish notions of this class. The following sec- 
tion also will be of service in general conversation on the subject 
of Investments. 

INTEREST ITS EFFECT ON INVESTMENTS. 

It would seem appropriate to this division of our subject to 
present a few illustrations on the effect of Interest upon Invest- 
ments. In no class of investments perhaps are its effects more ap- 
parent than in those of Life Assurance. In one instance we see 
premiums reduced to one-half or even one-fourth of what they 
could be were interest excluded from the calculation. In another, 
by a slight increase in the rate realised, bonuses become increased 
to almost incredible amounts. By the simple substitution of one 
rate of interest for another in actuarial valuations, Offices which 
are really insolvent, may be made to all appearance to revel in 
their surplus thousands. In fact, the consideration of interest 
meets us at all points. By its aid sums so insignificant as never 
to be heeded become amassed and multiplied into untold for- 
tunes. Interest, indeed, is the very Alchemy of Life Assurance 
and all monetary Investments : it transmutes even the most vul- 
gar coppers into masses of hard and solid gold. Let the reader 
cast his eye over the following Table, and then say if our estimate 
of the importance of interest is an exaggerated one ? It has 
been prepared in a simple form, as furnishing a more ready 
means of illustration. 



378 



TABLE. 








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RELATIVE EFFECTS OF SIMPLE AND COMPOUND INTEREST. 379 

Take the case of one shilling per day — a sura which many per- 
sons in the middle class of life could invest without the slightest 
inconvenience — and see what it will produce. In 30 years it 
amounts to £1,212 10s. 2d., made up as follows : — principal accu- 
mulated, £547 10s. 0d.— interest, £665 0s. 2d. ! — together, £1,212 
10s. 2d. In 50 years the principal amounts to £912 10s., while 
the interest thereon has reached the sum of £2908 2s., being more 
than three times greater than the principal ; and giving the total 
accumulations at £3,820 12s. Surely out of small beginnings 
come great endings ! 

These extraordinary results are, without doubt, due to the 
operations of compound interest — a term involved in great mystery 
to the uninitiated ; and upon which some little explanation appears 
necessary. To say that compound interest arises from capitaliz- 
ing the ordinary interest as it falls due, is by no means an intel- 
ligible, although it is a correct definition. Dr. Milne made the 
matter somewhat more understandable in this form — " If a lender 
of money, instead of insisting upon the payment of his simple 
interest whenever it becomes due, will indulge the borrower with 
the further loan of that interest itself, he shall not, therefore, 
suffer the loss of the interest such interest money would have 
yielded him had he exacted it when due, and immediately advanced 
it again either to the same borrower or another as a new loan." 

Mr. Hillman has given a still more lucid explanation, and as it 
is accompanied by one or two examples, it will be found of prac- 
tical use to the reader : — 

" Compound Interest is the recompense for the loan and the forbearance of 
the simple interest arising therefrom, which is added to the original sum at 
each period of its becoming due, and forms a new principal upon which simple 
interest is paid at the next period, when the same process is undergone until 
the sum is repaid with its accumulations. It will be evident that the shorter 
the period agreed on for the payment of the interest the greater will be the 
accumulation at the end of the term for the payment of the loan. For 
example : suppose the sum of £1,000 to be lent at 4 per cent, per annum — ■ 
compound interest — to each of three persons, A, B, C, for the term of twenty 
years — A to pay his interest yearly, B half-yearly, and C quarterly. A, at the 
end of the period, would have to pay the lender £2,191 2s. 5%d. ; B £2,208 0.9. 
9$d. ; C £2,216 14,9. d^d. Compound interest not only enables us to ascertain 
the sum to which any principal lent will amount at the expiration of a given 
period, but also the amount at a given time of yearly or any other i:>eriodical 

savings These illustrations will be sufficient to convince the 

lender of money that it is his benefit to procure the payment of interest at the 
shortest possible intervals." 

The relative effects of simple and compound interest may be 
well exhibited in the following manner. Money will double it- 
self at varying rates of interest, as follows : — 

At 2 per cent. Simple Interest in 50 years. Compound Interest in 35 years. 



2* « 


simple 


40 " 


compound ' 


28 


3 


' simple 


331 " 


compound ' 


23i 


3* ' 


' simple 


28i " 


compound ' 


20i 


4 


' simple 


25 " 


compound 


m 


4£ " simple 


22i " 


compound ' 


15f 



380 WONDERFUL POWERS OF THE PENNY. 

5 per cent. Simple Interest in 20 years. Compound Interest in 14J years. 



6 


' simple ' 


16* " 


compound 


" 


12 


7 


' simple ' 


14i * 


compound 


" 


m 


8 


' simple ' 


m " 


compound 


« 


9 


9 


' simple ' 


ii " 


compound 


a 


8 





' simple ' 


10 " 


compound 


et 


n 



The difference ranging from fifteen down to about three years. 

But, in order to demonstrate still further the great difference 
in effect between simple and compound interest, Mr. Francis 
Baily calculated, up to the year 1810, that if one penny had been 
put out at 5 per cent, compound interest at the birth of Christ, it 
would have amounted to more money than could be expressed by 
357 millions of globes, each equal to the earth in magnitude, all of 
solid gold of standard quality, worth at the mint price £3 17s. 
0%d. per ounce. Whereas, if the penny had been put out at the 
same rate of simple interest, the amount in the same time would 
have been only seven shillings and seven pence half-penny* 

Mr. Hillman carried the larger calculation on to the end of the 
year 1846 ; and at the same rate the number would be 2,107,530,- 
864 — two thousand one hundred and seven millions, five hundred 
and thirty thousand, eight hundred and sixty-four worlds of solid 
gold! Supposing the diameter of the earth to be 8,000 miles, 
these globes, placed in a straight line, would reach into space 
16,860,246,912,000 — sixteen billions, eight hundred and sixty 
thousand two hundred and forty-six millions, nine hundred and 
twelve thousand miles — quantities too large for human compre- 
hension. 

The wonderful productive power of the penny may be illus- 
trated in another and more practical manner. Every additional 
penny in the pound which we pay for income tax in this country 
raises an additional million sterling. Now one million per annum 
invested at four per cent., compound interest, for 82 years, would 
produce six hundred millions, or a sum nearly sufficient to wipe 
off the whole of the National Debt! A hundred years at this rate 
would entirely discharge it. 

It has been more than once observed, " few people appreciate 
the reversionary value of small sums." By way of still further 
exemplifying the wonderful power of interest, we have extracted 
the following Table from Mr. De Morgan's work on Probabilities. 
We draw a few of its uses from the last part of the Table. £138 
invested for 100 years at 2 per cent, compound interest will 
amount to £1,000 ; £85 at 2 \ per cent, for a like period will reach 
£1,000; at 3 per cent., £52 will reach that amount; at 3| per 
cent., £32 ; at 4 per cent., £20 ; at 4^- per cent., £12 ; and at 5 
per cent., £8. At 6 per cent. £3 will become £1,000 in 100 years, 
and at 7 per cent., £1. At 8 per cent. £1 will become £1,000 
in 95 years ; at 9 per cent, the like sum in 85 years ; and at £10 
per cent., £1 will become £1,000 in 75 years! 

* See Willich's popular tables. This calculation was first started in a note appended to the 
preface of Dr. Price's work on Beversionary Payments. 



TABLE. 



381 



TABLE 

Showing the number of pounds which will in a certain number of years, and 
at any of the following rates of Interest, produce £1,000 — the fractions 
of a £ being given or taken, as the case may be. 





2 per 


2£ per 


3 per 


3* per 


4 per 


4fper 


5 per 


6 per 


7 per 


8 per 


9 per 


10 per 


Yrs. 


cent. 


cent. 


cent. 


cent. 


cent. 


cent. 


cent. 


cent. 


cent. 


cent. 


cent. 


cent. 
£ 




£ 


£ 


£ 


£ 


£ 


£ 


£ 


£ 


£ 


£ 


£ 


1 


980 


976 


971 


966 


962 


957 


952 


943 


935 


926 


917 


909 


2 


961 


952 


943 


934 


925 


916 


907 


890 


873 


857 


842 


826 


3 


942 


929 


915 


902 


889 


876 


864 


840 


816 


794 


772 


751 


4 


924 


906 


888 


871 


855 


839 


823 


792 


763 


735 


708 


683 


5 


906 


884 


863 


842 


822 


802 


784 


747 


713 


681 


650 


621 


6 


888 


862 


837 


814 


790 


768 


746 


705 


666 


630 


596 


564 


7 


871 


841 


813 


786 


760 


735 


711 


665 


623 


583 


547 


513 


8 


853 


821 


789 


759 


731 


703 


677 


627 


582 


540 


502 


467 


9 


837 


801 


766 


734 


703 


673 


645 


592 


544 


500 


460 


424 


10 


820 


781 


744 


709 


676 


644 


614 


558 


508 


463 


422 


386 


11 


804 


762 


722 


685 


650 


616 


585 


527 


475 


429 


388 


350 


12 


788 


744 


701 


662 


625 


590 


557 


497 


444 


397 


356 


319 


13 


773 


725 


681 


639 


601 


564 


530 


469 


415 


368 


326 


290 


14 


758 


708 


661 


618 


577 


540 


505 


442 


388 


340 


299 


263 


15 


743 


690 


642 


597 


555 


517 


481 


417 


362 


315 


275 


239 


16 


728 


674 


623 


577 


534 


494 


458 


394 


339 


292 


252 


218 


17 


714 


657 


605 


557 


513 


473 


436 


371 


317 


270 


231 


198 


18 


700 


641 


587 


538 


494 


453 


416 


350 


296 


250 


212 


180 


19 


686 


626 


570 


520 


475 


433 


396 


331 


277 


232 


194 


164 


20 


673 


610 


554 


503 


456 


415 


377 


312 


258 


215 


178 


149 


21 


660 


595 


538 


486 


439 


397 


359 


294 


242 


199 


164 


135 


22 


647 


581 


522 


469 


422 


380 


342 


278 


226 


184 


150 


123 


23 


634 


567 


507 


453 


406 


363 


326 


262 


211 


170 


138 


112 


24 


622 


553 


492 


438 


390 


348 


310 


247 


197 


158 


126 


102 


25 


610 


539 


478 


423 


375 


333 


295 


233 


184 


146 


116 


92 


26 


598 


526 


464 


409 


361 


318 


281 


220 


172 


135 


106 


84 


27 


586 


513 


450 


395 


347 


305 


268 


207 


161 


125 


98 


76 


28 


574 


501 


437 


382 


333 


292 


255 


196 


150 


116 


90 


69 


29 


563 


489 


424 


369 


321 


279 


243 


185 


141 


107 


82 


63 


30 


552 


477 


412 


356 


308 


267 


231 


174 


131 


99 


75 


57 


35 


500 


421 


355 


300 


253 


214 


181 


130 


94 


68 


49 


36 


40 


453 


372 


307 


253 


208 


172 


142 


97 


67 


46 


32 


22 


45 


410 


329 


264 


213 


171 


138 


111 


73 


48 


31 


21 


14 


50 


372 


291 


228 


179 


141 


111 


87 


54 


34 


21 


13 


9 


55 


337 


257 


197 


151 


116 


89 


68 


41 


24 


15 


9 


5 


60 


305 


227 


170 


127 


95 


71 


54 


30 


17 


10 


6 


3 


65 


276 


201 


146 


107 


78 


57 


42 


23 


12 


7 


4 


2 


70 


250 


178 


126 


90 


64 


46 


33 


17 


9 


5 


2 


1 


75 


226 


157 


109 


76 


53 


37 


26 


13 


6 


3 


2 


1 


80 


205 


139 


94 


64 


43 


30 


20 


9 


4 


2 


1 


— 


85 


186 


123 


81 


54 


36 


24 


16 


7 


3 


1 


1 


— 


90 


168 


108 


70 


45 


29 


19 


12 


5 


2 


1 


— 


— 


95 


152 


96 


60 


38 


24 


15 


10 


4 


2 


1 


— 


— 


100 


138 


85 


52 


32 


20 


12 


8 


3 


1 


— 


— 


— 



CHAPTER H. 

PURCHASE OF LIFE POLICIES— MODE OF ASCERTAINING THEIR 

VALUE. 

There are few points upon which greater misapprehension pre- 
vails than upon the value of Life Policies. One class of persons 
look at their value simply in relation to the premiums paid upon 
them, without any regard to the risk incurred during the currency 
of the policy ; the other class look to the sum assured, without tak- 
ing any account that that sum only falls payable on the extinction 
of the life, and that in the meantime premiums are payable to the 
Office to keep the policy in force. Each of these parties is there- 
fore as far from the true solution of the difficulty as it is possible 
to imagine. 

Agents are constantly appealed to by persons who, either from 
curiosity or business motives, desire to know something of the 
value of tjieir policies ; and although none but the professional 
actuary can determine with exactness all the points which require 
to be considered in such cases, still the main considerations may 
be discussed and familiarized ; and something like a general 
principle laid down for the guidance of our readers. 

The valuation of the assets and liabilities of a Life Office, as we 
have seen, involves three processes : — 1st, To ascertain the present 
value of the reversion of the sum originally assured after extinc- 
tion of the Life. 2nd, To ascertain the present value of the re- 
version of the additions made to the policy (if any) after the ex- 
tinction of the Life ; and 3rdly, To ascertain the present value of 
all the annual premiums which will probably be made thereafter 
on the policy. The latter value subtracted from the two former 
gives the value of the policy or the money which the Office owes 
to the assured for his interest therein. 

The same process which determines the value for the Office 
estimate will determine the value as between buyer and seller. 
Of course where no bonus additions have been made, the second 
process will not occur in either instance. 

If we keep in mind that Life Assurance is a " contract among 
those who invest, that the inequalities of life shall be compen- 
sated, so that those who do not live their average time shall be 
sharers in the good fortune of those who exceed it" — we shall 
readily understand that an Office can never be in a position to 
return more than a portion of the premiums paid on any parti- 
cular policy. This, indeed, has been fully explained in our chap- 
ters on " surrender value of policies," (p. 250) and on "premiums" 
(vide p. 278), the "natural" premium there shown (without any 
loading) having in all cases to be deducted, and in addition tp 



PRECAUTIONS IN PURCHASING POLICIES. 383 

this, of course, a fair proportion of the loading of the " equalized" 
premium for expenses of management. 

For the difference between the premiums paid and the " sur- 
render value" of the policy, the person assured has had the ad- 
vantage of the continued guarantee of the sum named in his 
policy had he died. Fortunately, he has survived, and has there- 
fore had the satisfaction of giving instead of receiving. Surely 
his reward lies in his continued enjoyment of life! 

The rule which Dr. Price laid down with respect to Offices, 
applies with equal, if not more, force to individual purchasers : 
" The plan of every Society ought always to be such that the 
losses arising from the discontinuance of payment should fall on 
the policy-holder, :ind never on the Society." The man who has 
to sell his policy has to sustain all the pecuniary sacrifices attend- 
ing such sale. The purchaser, it is only fair to expect, will be on 
the safe side : but how is he to know when he is safe ? It is the 
purpose of the present chapter to tell him. 

In our chapter on the method of ascertaining the surplus we 
have already shown in detail the process which has to be gone 
through to ascertain the value of each individual policy. We 
have now to furnish the reader with the means of ascertaining the 
several values employed in the process. 

Before coming to the actual tables necessary for this purpose, 
we may glance at one or two considerations which naturally arise 
on the question. The first is, that the purchaser of a life policy, pro- 
viding he is not personally acquainted with the person whose life 
is assured, may constantly be put to trouble and expense in order 
to ascertain, prior to each payment which falls due, that the as- 
sured is still alive ; and, secondly, that if alive he has not tres- 
passed beyond the limits of travel and residence prescribed by 
the conditions of the policy. This last condition is, if possible, 
the more important of the two — because the policy may therefore 
become absolutely forfeited ; or if not forfeited, such an additional 
payment may be demanded at any moment as to render the pur- 
chase, however apparently good at the time, a ruinously bad 
speculation. The difficulty in proving death in such cases ought 
likewise not be overlooked. On the other hand, the purchaser 
possesses an element of certainty, or of security, which (except in 
one or two Offices) never attached to the policy while in posses- 
sion of the life assured : — viz., that when in hands of a bond fide 
purchaser the policy is not rendered void either by suicide, duel- 
ling, or even death by the hands of justice.* The chances, how- 
ever, of these latter contingencies are not nearly so perilous as 
of those first mentioned. 

* The question of the assignment of policies is an important one to Assurance Offices. 
The custom has arisen partly from competition, and partly out of a principle of the common 
law that a man may dispose of any property he is possessed of. The change in the con- 
dition appears essential to the assignment, although it is certainly prejudicial to the Office, 
An assigned policy may be forfeited by overstepping the limits of foreign travel or residence, 
although not by death by suicide, duelling, or the hands of justice ; the assumption being, 
we presume, that the holder of the policy can compensate the Office for a breach of the 
former condition, but not of the latter ones. 



384 MODE OF VALUING LIFE POLICIES. 

On the stability of the Office in which the assurance has been 
effected, and its chances of success if a young Office — or, main- 
taining its former rates of bonus, if an old one — some attention 
should also be bestowed. In a word : neither the prudential mo- 
tives which may be supposed to have actuated the assured in 
effecting the policy nor the particular interests or connexions 
which led him to any particular Office, can have the slightest 
weight with the purchaser : hence, he can only look at the matter 
purely as a question of profit and loss, or of his own individual 
security. 

The most simple method of ascertaining the value of a policy 
for a purchaser appears to be this. Ascertain the premium paid 
at the time the policy was effected, and the premium which would 
have to be paid for a policy of a like amount on the same life at 
its present age. An example will make the plan better under- 
stood. Assume a person to assure at age 30 for £1,000, and to 
pay £25 annual premium for his policy. Assume him, also to 
remain assured until he reaches the age of 50, and that he then 
desires to sell the policy. The first step towards ascertaining the 
value is to ascertain the premium to be paid at age 50 for a like 
Assurance. This may be taken at £45 per annum. The vendor 
then offers to the purchaser an article which has become more 
valuable by £20 per annum than when he, the vendor, first ob- 
tained it. The purchaser has to ascertain the value of this £20 
per annum to him during the probable existence of the policy, 
and calculated upon an assumption that he shall realise a certain 
rate of interest on the investment — say, for our present purpose, 
4 per cent. This is simply done by reference to an annuity table, 
— the Carlisle 4 per cent, table being most frequently consulted 
in such cases ; and it shows the value of an annuity on £20 on a 
life aged 50 to be in round numbers £257 8s. 

This method has the approval of Professor de Morgan, who 
several times refers to it in his Essay on Probabilities.* It does 
not, it will be observed, take into account either the bonus addi- 
tions made to the policy, or the future premiums to be paid ; and, 
therefore, it must be admitted that simplicity is secured somewhat 
at the expense of exactness. 

Where the bonus additions are considerable, or where great 
exactness is requisite, the plan of valuation should be that given 
at page 315, as the mode employed in conducting the valuations 
for bonus ; and the tables at the end of this chapter furnish the 
means of carrying out the process. An example or two will be 
useful. 

As some of our readers may require to use the following pro- 

* " To find the present value of a policy of Assurance, at the moment before a premium 
becomes due, subtract the premium which is to be paid from the premium which would be 
paid if the same party made the same Assurance at the present time. Find the present value 
of an annuity on the life of the party assured, of the same yearly amount as the preceding 
difference, and this value increased by one year's purchase is the present value of the 
poMcy.' 1 — Pernor de Morgan. 



MODE OF VALUING LIFE POLICIES. 385 

cess in practice, we must be more exact than in the former case. 
In such matters, indeed, exactitude is of great moment. The 
profit or loss of a transaction may and frequently does depend 
upon this. Assume a person assured for £1,000; that he com- 
menced the assurance at age 30, paying a premium of £25 per 
annum, and that on arriving at the age of 50 he has occasion to 
dispose of his policy. What should the purchaser give ? Turning 
to Table No. 1, the present value of £1,000 on the (probable) 
death of a person aged 50 is (see 4 per cent, column) £466. But 
from this has to be deducted the present value of the annuity of 
£25, being the annual premium payable to keep the policy in 
force. This value is derived from Table No. 2. The present 
value of an annuity of £1 at age 50 (Carlisle 4 per cent. Table) 
is £12 lis. 5cl (12-869), which being multiplied by 25 gives £321, 
which deducted from the £446 leaves the value of the policy 
only £145, or less by more than £100 than the value shown in 
the previous example. But since we have begun to be exact, we 
must remember that the rates which demand a premium of £25 
for an assurance of £1,000 at age 30 will be intended to yield a 
fair, or indeed, if the Office be well selected, a good bonus return: 
hence in valuing the policy we must value all additions to it, 
otherwise an injustice will be done to the vendor. Now the pro- 
bable reversionary bonus additions on a £1,000 policy, in a good 
Office, for a period of twenty years, would be some £300 at least. 
The present value of £300 on a life aged 50 is, according to Table 
No. 1, £140 (being -46658 multiplied by 300), or nearly as much 
as the value of the policy — there being no annuity value to set 
off against the bonus, so that the value of the policy and addi- 
tions turn out to be £285, instead of only £145, as shown without 
the bonus. This is more favorable to the vendor by nearly £30 
than the result shown by the annuity value alone, as given on the 
previous page. 

But there are other elements of consideration. In the above 
examples we have assumed the purchaser to be satisfied with the 
prospect of four per cent, interest for his money. He may, how- 
ever, in entering upon this class of speculation consider himself 
entitled to make five or even six per cent. ; and this determination 
will considerably alter the prospects of the vendor. For the pur- 
pose of illustrating this, we will tabulate the above example 
under three several rates of interest, viz., four per cent, as used 
above, five and six per cent. 

FOUR PER CENT. 

Age 50— Policy £1,000— Bonus £300— Annual Premium £25. 

Present value of sum assured £466 

Present value of bonus 140 

606 
Deduct value of annuity of premium . . . . . . 321 

Leaving value . . £285 



386 MODE OF VALUING LIFE POLICIES. 

FIYE PER CENT. 

Present value of sum assured £397 

Present value of bonus 119 

516 

Deduct value of annuity of premium 291 

Leaving value . . . . . . . . . . £225 

SIX PER CENT. 

Present value of sum assured. . . . . . . . . . £341 

Present value of bonus 102 

443 

Deduct value of annuity of premium 265 

Leaving value £178 

Both the value of the sum assured and bonus additions, and 
the value of the annuity of the premium, decrease as the rate of 
interest increases. If the value of the annuity decreased to the 
same extent as the two former values decrease, of course the 
value of the policy would remain the same, whatever rate of in- 
terest might be assumed ; but this is seen not to be the case. If 
the purchaser desired to make some exorbitant rate of interest, as 
ten or twelve per cent., he could not afford to give any purchase- 
money for £1,000, even of 20 years' standing. We have very 
rarely known policies to be purchased on such terms as would 
probably secure the purchaser more than four or five per cent., 
particularly if purchased by public auction. 

It is important that we should remind the reader that many 
causes may exist or combine to render the process of valuing a 
policy far more complicated than that we have just shown. Such, 
for instance, as where the premium is on an increasing or decreas- 
ing scale, or where more than one life is interested ; as, for 
instance, where the amount of the policy becomes payable on the 
death of the first or last of two, three, or more lives. The com- 
putation then becomes one which none but the professional 
actuary can approach. Upon these points we shall not therefore 
enter further. Of course, where the bonuses have been applied 
to reduction of premium, the reduced premium, that is the pre- 
mium payable at the time of the sale of the policy, only will be 
valued. An example may be given based upon the case already 
assumed, viz., £1,000 assured ; original premium £25 ; age at time 
of sale 50. In this case there will be no bonus to value ; and we 
must assume, for the sake of simplicity, that the £300 had been 
applied to the reduction of the premium just previous to the policy 
being sold. £300 will purchase, according to the Carlisle (4 per 
cent.) Table, an annuity of £10 105. at age 50: the premium is 
therefore reduced by that amount. The figures then stand as 
follows : — 

Value of sum assured . . £466 

Less value of annuity of reduced premium . . . . 186 

Leaving value. , ,, .. .... .. .. £280 



TABLES. 387 

A result differing only £5 from that given on page 385, where 
the same rate of interest has been assumed. The cause of this 
slight difference could be explained if necessary. 

As many of our readers may be presumed to be almost entirely 
unfamiliar with the uses of the following Tables, except in so far 
as they have been exemplified in the preceding examples, it 
appears desirable to give some brief explanation of their construc- 
tion and purposes. 

Table No. I. 

This Table shows the present value of £1, £10, £100, or £1,000, 
to be received on the death (or, to be more exact, to be received 
at the end of the year in which death may take place), of a life at 
any age, from birth up to 103. It is based upon the Carlisle Ta- 
ble of Mortality ; and in its construction the element of interest 
has been taken into account. The present value of a sum of money 
is, as we have elsewhere explained, the amount of such sum, less 
the interest it would produce at any given rate during the period 
which is to elapse before the payment is to be made. The pre- 
sent value of £1,000 on a life aged 50, is (assuming interest at 4 
per cent.) such a sum as would, by being improved at the rate of 
interest named, amount to £1,000 on the probable extinction of a 
life now of that age, viz., £466. If interest be taken at 5 (instead 
of 4) per cent., the present value of £1,000 payable on the death 
of a life aged 53 is £397. 

A person buying the reversion of — or what is the same thing, a 
life policy for — £1,000, having made up his mind what rate of 
interest he wishes to realise on his investment, may see at a glance 
what sum he should give for the same. The price varies with 
each year of age ; and in the case of a life policy, the value of the 
future premiums to be paid to keep the assurance in force has to 
be taken into account. This last value is obtained from Table 
ISTo. 2. 

Those readers who are not familiar with decimal notation will 
require to know how this and the following Tables are read, in 
order to obtain the values of £10, £100, or £1,000 as above stated. 
The method is simple enough — simplicity being a quality inherent 
to the decimal system. It rests in placing the decimal point (•). 
In the example above given, the point is to the left of all the 
figures. Each move of the point to the right adds the power of ten 
to the figures on the left. Thus, the present value of £1, payable 
on the death of a life aged 50 (4 per cent, column) is £'46658. 
The present value of £10 on the same life, at same rate of interest, 
is £4-6658 ; of £100, £46*658 ; of £1,000, £466*58. The -58 left 
over is read as follows: the 5 stands for five-tenths of a pound, or 
105. ; the 8 for eight-hundredth parts of a pound, or Is, 8d. The 
•58 represents lis. Sd. But if it was required to know the value 
of £10,000, or £100,000, these two figures furnish the value : the 
£10,000 being £4,665*8 ; the £100,000, £46,658*. 



388 TABLES. 



Table No. II. 



This Table gives the present Value of an annuity of £1, £10, 
£100, or £1,000, to be received during the unexpired portion of 
the life of a person of any age from birth up to 103. The ordinary 
method of estimating the value of an annuity or an estate is by 
multiplying the amount of the annuity or rent by the number of 
years it may be expected to be received. But this method is 
necessarily very erroneous, because the element of interest is left 
out of the account. By this process of valuing, a person purchas- 
ing an annuity of £25 per annum on a life aged 50, would look to 
the Mortality Table, and finding the expectation of life at that 
age to be 21 years, would arrive at £525 as the value. But if he 
wished to realize 4 per cent, interest, this Table shows him he 
cannot afford to give more than £321, or not so much by more 
than £200. This last value is obtained by casting the eye down 
the 4 per cent, column to age 50, wbere the figures stand at 
12*869 (or £12 lis. 4d. for every £1 of the annuity), which, mul- 
tiplied by 25, gives the result named. 

The peculiar feature of this Table is, that it not only gives the 
present value of annuities, but that the same figures represent 
years and decimal parts of years. Thus, in the case just given, it 
is optional whether we treat the 12*869 (column 3, age 50) as £12 
17s. 4cl, or 12f years. Taking this last view, let us multiply the 
supposed annuity of £25 by 12f years, and we have the same re- 
sult, viz., £321, as the value of the annuity. 

The value of these Tables (I. and II.) in all assurance calcula- 
tions, will only be fully appreciated as the reader comes more 
fully to understand them. 

Table No. III. 

This Table shows the present value of £1 (or, as already ex- 
plained, of £10, £100, £1,000, or upwards) to be received at the 
end of any given number of years not exceeding 100, discounted 
at the 3, 4, 5, 6, 7, 8, 9, or 10 per cent, compound interest. 

The element of mortality does not enter into this Table. It has 
to do with fixed, and not contingent, events or periods, and has, 
therefore, no direct bearing upon Life Assurance calculations. 
Still, it has many uses, as will be obvious to the reader. 

Table No. IV. 

This Table shows the annuity which £1 (or, on the principle 
already explained), £10, £100, or £1,000, will purchase for any 
number of years, from 1 up to 100, or for a perpetuity, at the seve- 
ral rates of interest following, viz., 3, 4, 5, 6, 7, 8, 9, and 10 per 
sent. .. 

Thus £1 to be improved at 3 per cent, interest will purchase an 



TABLES. 389 

annuity of Is. 4d. (0*672) for 20 years. £10, therefore, at 3 per 
cent., will purchase an annuity of 13s. bd. (-672) ; £100 would se- 
cure an annuity of £6 14s. hd. (6*72), or £1,000, of £67 4s. for 20 
years certain. 

But if 4 per cent, interest were to be realized, at 4 per cent. £1 
would purchase an annuity certain for 20 years, of Is. Qd. ; £10, 
of 14s. 9d. (-736); £100 of £7 7s. 3d. (7*36); and £1,000, of 
£73 12s. (73-6). 

As the rate of interest, at which the principal is to be improved, 
increases, the amount of the annuity also increases. Under most 
of the Tables, the higher the rate of interest assumed to be real- 
ized, the lower the values given ; but with annuities this rule is 
reversed, as the purchaser secures the advantage of the higher 
rate. 

The element of mortality does not enter into this Table. 

Table No. V. 

This Table shows the manner in which £1, £10, £100, or 
£1,000, invested at any given period, at a given rate of interest, 
will accumulate at a compound ratio during any period for which 
it maybe invested, from 1 to 100 years. 

This Table will be found exceedingly useful in all matters con- 
nected with investments, more particularly where it is important 
to test the effect of varying rates of interest. The results are 
very striking. £1 invested for 50 years, at 2 per cent., will amount 
to £2 14s. Od. (2-691) ; at 5 per cent, it will amount to £11 9s. Od. 
(11-467); at 10 per cent, to £117 8s. Od. (117'390). In 100 
years, £1 invested at 2 per cent., will amount to £7 5s. Od. (7*244) ; 
at 5 per cent. £131 10s. Od. ; or at 10 per cent., to £13,780 12s. Od. 
(13780-61)! 

If the examples are extended into tens, hundreds, or thousands, 
the results appear still more startling. 

Table No. VI. 

This Table is similar in its construction to the last, but it shows 
the accumulation of £1, £10, £100, or £1,000 per annum (as dis- 
tinguished from a given sum paid down) for any number of years, 
from 1 to 100, at a given rate of interest, viz., 2, 3, 4, 5, 6, 8, and 10. 

Thus £1 per annum for 50 years, improved at 2 per cent., com- 
pound interest, will amount to (in principal and interest) £84; at 
5 per cent., to £209 ; and at 10 per cent., to £1,163 ! In 100 
years, £1 per annum, improved at 2 per cent., will amount to 
£312 ; at 5 per cent., to £2,610 ; and at 10 percent., to £137,796 ! 

In comparison of the rates of premium of the different Offices, 
this Table will be found of service : as also in many other respects 
in connection, with Assurance investments. 



390 TABLES. 



Table No. VII. 

This Table shows the present value of an Annuity of £1 (or 
£10, or £100, or £1,000) for any number of years not exceeding 
100, at the following several rates of interest, viz. : 3, 4, 5, 6, V, 8, 
9, and 10 per cent. 

By means of this Table the value of an Annuity certain for any 
number of years is ascertained with ease ; the purchaser first hav- 
ing simply to determine the rate of interest he desires to realize 
on his investment. 

The values are given for each half year up to 50. This will be 
found of advantage. 



TABLES. 



No. L— The present value of £1 to be received at death (Carlisle 
Table). 

No. II. — The present value of an Annuity to be received during 
life (Carlisle Table). 

No. III. — The present value of £1, to be received at the end of 
any given number of years. 

No. IV". — The Annuity which £1 will purchase for any number 
of years. 

No. V. — The compound accumulations of £1. 

No. VI. — The compound accumulations of £1 per annum. 

No. VII. — The present value of an Annuity of £1. 



392 



TABLES. 



TABLE No. I. 

the present value of £1 {or of £10, £100, or £1,000) to he received at 
the end of the year in which a life may be expected to die, according to the 
Carlisle Table of Mortality. 



Ages. 


3 per Cent. 


4 per Cent. 


5 per Cent. 6 J 


er Cent. 7 1 


er Cent. 8 1 


er Cent. 


Years. 





•46641 


•41224 


•37700 


35251 


33421 


32015 





1 


•38587 


•32483 


•28595 


25974 


24079 


22674 


1 


2 


•34463 


•27976 


•23891 


21179 


19258 


17867 


2 


3 


•31021 


•24173 


•19886 


17065 


15097 


13696 


3 


4 


•29267 


•22187 


•17757 


14857 


12847 


11430 


4 


5 


•28079 


•20800 


•16238 


13255 


11198 


09748 


5 


6 


•27633 


•20211 


•15548 


12491 


10387 


08904 


6 


7 


•27572 


•20038 


•15286 


12163 


10007 


08489 


7 


8 


•27764 


•20137 


•15305 


12117 


09916 


08363 


8 


9 


•28125 


•20419 


•15514 


12264 


10021 


08430 


9 


10 


•28606 


•20833 


•15862 


12558 


10263 


08637 


10 


11 


•29145 


•21313 


•16281 


12921 


10577 


08919 


11 


12 


•29681 


•21789 


•16695 


13277 


10891 


09193 


12 


13 


•30222 


•22272 


•17114 


13640 


11211 


09474 


13 


14 


•30771 


•22762 


•17543 


14013 


11538 


09763 


14 


15 


•31315 


•23249 


•17967 


14381 


11859 


10045 


15 


16 


•31833 


•23706 


•18362 


14715 


12147 


10289 


16 


17 


•32334 


•24150 


•18733 


15026 


12408 


10511 


17 


18 


•32841 


•24590 


•19110 


15343 


12677 


10733 


18 


19 


•33362 


•25052 


•19505 


15677 


12958 


10970 


19 


20 


•33901 


•25532 


•19919 


16028 


13259 


11222 


20 


21 


•34455 


•26031 


•20352 


16402 


13579 


11496 


21 


22 


•35037 


•26562 


•20819 


16809 


13933 


11807 


22 


23 


•35637 


•27115 


•21310 


17240 


14312 


12141 


23 


24 


•36252 


•27690 


•21824 


17692 


14711 


12496 


24 


25 


•36808 


•28289 


•22367 


18174 


15136 


12874 


25 


26 


•37584 


•28901 


•22919 


18672 


15581 


13267 


26 


27 


•38218 


•29538 


•23500 


19198 


16052 


13689 


27 


28 


•38890 


•30176 


•24086 


19725 


16529 


14119 


28 


29 


•39531 


•30781 


•24633 


20211 


16962 


14504 


29 


30 


•40129 


•31338 


•25129 


20642 


17335 


14830 


30 


31 


•40734 


•31903 


•25633 


21083 


17714 


15155 


31 


32 


•41357 


•32491 


•26162 


21547 


18120 


15504 


32 


33 


•42010 


•33113 


•26729 


22051 


18564 


15889 


33 


34 


•42694 


•33771 


•27333 


22594 


19049 


16319 


34 


35 


•43399 


•34457 


•27967 


23172 


19565 


16778 


35 


36 


•44117 


•35170 


•28633 


23783 


20115 


17274 


36 


37 


•44870 


•35901 


•29319 


24411 


20684 


17793 


37 


38 


•45624 


•36649 


•30024 


25062 


21279 


18326 


38 


39 


•46393 


•37416 


•30752 


25736 


21894 


18889 


39 


40 


•47156 


•38178 


•31477 


26404 


22509 


19444 


40 


41 


•47893 


•38911 


•32167 


27038 


23085 


19963 


41 


42 


•48621 


•39636 


•32852 


27666 


23648 


20467 


42 


43 


•49352 


•40264 


•33538 


28294 


24210 


20971 


43 


44 


•50108 


•41120 


•34257 


28957 


24805 


21504 


44 


45 


•50885 


•41905 


•35010 


29653 


25440 


22074 


45 


46 


•51694 


•42734 


•35810 


30400 


26127 


22696 


46 


47 


•52542 


•43607 


•36662 


31204 


26873 


23378 


47 


48 


•53439 


•44542 


•37586 


32087 


27697 


24141 


48 


49 


•54406 


•45565 


•38610 


33077 


28639 


25030 


49 


50 


•55429 


•46658 


•39714 


34164 


29679 


26022 


50 


51 


•56509 


•47824 


•40905 


35347 


30831 


27126 


51 



TABLES. 



393 



TABLE No. I.— {Continued) 

Shotting the present value of £1, (or of £10, £100, or £1000) to he received at 
the end of the year in which a life may be expected to die, according to the 
Carlisle Table of Mortality. 



Years. 


3 per Cent. 


4 per Cent. 


5 per Cent. 


6 per Cent. 


7 per Cent. 


8 per Cent. 


Years. 


52 


•57598 


•49008 


•42124 


•36558 


•32015 


•28267 


52 


53 


■58699 


•50211 


.43371 


•37804 


•33238 


•29459 


53 


54 


•59812 


.51436 


•44648 


•39089 


•34507 


•30696 


54 


55 


•60948 


•52694 


•45967 


•40431 


•35842 


•32007 


55 


56 


•62096 


•53977 


•47319 


•41812 


•37229 


•33370 


56 


57 


•63260 


•55286 


•48710 


•43243 


•38668 


•34800 


57 


58 


•64413 


•56591 


•50105 


•44687 


•40121 


•36252 


58 


59 


•55512 


•57833 


•51433 


•46062 


•41514 


•37644 


59 


60 


•66531 


•58987 


•52667 


•47336 


•42803 


•38926 


60 


61 


•67436 


•60007 


•53752 


•48445 


•43922 


•40036 


61 


62 


•68325 


•61012 


•54824 


•49549 


•45027 


•41133 


62 


63 


•69222 


•62033 


•55914 


•50676 


•46165 


•42259 


63 


64 


•70157 


•63103 


•57067 


•51875 


•47389 


•43481 


64 


65 


•71112 


•64203 


•58262 


•53126 


•48664 


•44763 


65 


66 


•72103 


•65347 


•59510 


•54440 


•50012 


•46133 


66 


67 


•73122 


•66539 


•60824 


•55832 


•51451 


•47593 


67 


68 


•74168 


•67770 


•62186 


•57287 


•52969 


•49141 


68 


69 


•75246 


•69043 


•63605 


•58809 


•54565 


•50793 


69 


70 


•76340 


•70349 


•65067 


•60389 


•56234 


•52519 


70 


71 


•77465 


•71701 


•66595 


•62053 


•58000 


•54371 


71 


72 


•78525 


•72979 


•68043 


•63638 


•59687 


•56134 


72 


73 


•79483 


•74136 


•69357 


•6J075 


•61225 


•57748 


73 


74 


•80334 


•75161 


•70524 


•66355 


•62586 


•59178 


74 


75 


•81033 


•76004 


•71481 


•67396 


•63698 


•60333 


75 


76 


•81717 


•76831 


•72419 


•68421 


•64791 


•61481 


76 


77 


•82352 


•77597 


•73291 


•69377 


•65805 


•62548 


77 


78 


•82996 


•78378 


■74181 


•70351 


•66851 


•63645 


78 


79 


•83713 


•79256 


•75191 


•71472 


•68055 


•64919 


79 


80 


•84374 


•80066 


•76119 


•72502 


•69167 


•66096 


80 


81 


•85090 


•80950 


•77148 


•73645 


•70410 


■67422 


81 


82 


■85734 


•81745 


•78067 


•74675 


•71529 


•68615 


82 


83 


•86392 


•82561 


•79019 


•75740 


•72693 


•69859 


83 


84 


•87027 


•83352 


•79948 


•76781 


•73838 


•71089 


84 


85 


•87682 


•84173 


•80910 


•77874 


•75042 


•72393 


85 


86 


•88253 


•84891 


•81762 


•78836 


•76108 


•73548 


86 


87 


•88719 


•85477 


•82452 


•79628 


•76978 


•74496 


87 


88 


•89002 


•85833 


•82870 


•80101 


•77502 


•75067 


88 


89 


•89325 


•86242 


•83357 


•80658 


•79078 


•75733 


89 


90 


•80809 


•86861 


•84103 


•81513 


•79196 


•76793 


90 


91 


•89861 


•86929 


•84186 


•81615 


•78634 


•76926 


91 


92 


•89582 


•86569 


•83752 


•81111 


•77973 


•76311 


92 


93 


•89261 


•86156 


•83248 


•80528 


•77633 


•75578 


93 


94 


•89118 


•85962 


•83005 


•80234 


•77512 


•75185 


94 


95 


•89057 


•85868 


•82876 


•80064 


•77424 


•74941 


95 


96 


•89212 


•86047 


•83071 


•80268 


•77626 


•75126 


96 


97 


•89633 


•86569 


•83676 


•80936 


•78352 


•75904 


97 


98 


•90132 


•87184 


•84391 


•81734 


•79216 


•76822 


98 


99 


•90880 


•88127 


•85500 


•82996 


•80609 


•78326 


99 


100 


•92185 


•89797 


•87505 


•85306 


•83193 


•81163 


100 


101 


•93511 


•91500 


•89562 


•87689 


•85875 


•84133 


101 


102 


•94842 


•93224 


•91653 


•90128 


•88650 


•87207 


102 


103 


•96144 


•94921 


•93728 


•92562 


•91417 


•90304 


103 I 



394 



TABLES. 



TABLE II. 



Showing the value of an Annuity on a 


Single Life, in years 


and decimal parts 




of years, according to the Carlisle Table of Mortality. 




Ages. 


3 per Cent. 


4 per Cent. 


5 per Cent. 


6 per Cent. 


7 per Cent. 


8 per Cent. 


Ages. 


1 


20-085 


16-556 


13995 


12-078 


10605 


9*439 


1 


2 


21-501 


17-728 


14-983 


12-925 


11-342 


10-088 


2 


3 


22-683 


18-717 


15-824 


13-652 


11-978 


10651 


3 


4 


23-285 


19-233 


16271 


14-042 


12-322 


10-957 


4 


5 


23693 


19-594 


16-590 


14-325 


12-574 


11-184 


5 


6 


23-846 


19-747 


16-735 


14-460 


12-698 


11-298 


6 


7 


23-867 


19-792 


16-790 


14-518 


12-756 


11-354 


7 


8 


23-801 


19-766 


16-786 


14-526 


12-770 


11-371 


8 


9 


23-677 


19-693 


16-742 


14-500 


12-754 


11-362 


9 


10 


23-512 


19-585 


16-669 


14-448 


12-717 


11-334 


10 


11 


23-327 


19-460 


16-581 


14-384 


12-669 


11-296 


11 


12 


23-143 


19-336 


16-494 


14-321 


12-621 


11-259 


12 


13 


22-957 


19-210 


16-406 


14-257 


12-572 


11-221 


13 


14 


22-769 


19082 


16-316 


14-191 


12-522 


11-182 


14 


15 


22-582 


18-956 


16-227 


14-126 


12-473 


11-144 


15 


16 


22-404 


18-837 


16-144 


14-067 


12-429 


11-111 


16 


17 


22-232 


18-723 


16066 


14-012 


12-389 


11-081 


17 


18 


22-058 


18-608 


15-987 


13-956 


12-348 


11-051 


18 


19 


21-879 


18-488 


15-904 


13-897 


12-305 


11019 


19 


20 


21-694 


18-363 


15-817 


13-835 


12-259 


10985 


20 


21 


21-504 


18-233 


15-726 


13-769 


12-210 


10-948 


21 


22 


21-304 


18095 


15-628 


13-697 


12-156 


10-906 


22 


23 


21-098 


17-951 


15-525 


13-621 


12-098 


10-861 


23 


24 


20-885 


17-801 


15-417 


13-541 


12-037 


10813 


24 


25 


20-665 


17-645 


15-303 


13-456 


11-972 


10-762 


25 


26 


20-442 


17-486 


15-187 


13-368 


11-904 


10709 


26 


27 


20-212 


17-320 


15065 


13-275 


11-832 


10-652 


27 


28 


19-981 


17.154 


14-942 


13-182 


11-759 


10-594 


28 


29 


19-761 


16-997 


14-827 


13096 


11-693 


10-542 


29 


30 


19-556 


16-852 


14-723 


13020 


11-636 


10-498 


30 


31 


19:348 


16-705 


14-617 


12-942 


11-578 


10-454 


31 


32 


19-134 


16-552 


14-506 


12-860 


11-516 


10-407 


32 


33 


18-910 


16-390 


14-387 


12-771 


11-448 


10-355 


33 


34 


18-675 


16-219 


14-260 


12-675 


11-374 


10-297 


34 


35 


18-433 


16-041 


14-127 


12-573 


11-295 


10-235 


35 


36 


18-183 


15-856 


13-987 


12-465 


11-211 


10-168 


36 


37 


17-928 


15-666 


13-843 


12-354 


11-124 


10-098 


37 


38 


17-669 


15-471 


13-695 


12-239 


11033 


10026 


38 


39 


17-405 


15-272 


13-542 


12-120 


10-939 


9-950 


39 


40 


17143 


15074 


13390 


12002 


10845 


9-875 


40 


41 


16-890 


14-883 


13-245 


11-890 


10-757 


9-805 


41 


42 


16640 


14-694 


13-101 


11-779 


10-671 


9-737 


42 


43 


16-389 


14-505 


12957 


11-668 


10-585 


9-669 


43 


44 


16-130 


14-308 


12-806 


11-551 


10-494 


9-597 


44 


45 


15-863 


14-104 


12-648 


11-428 


10-397 


9-520 


45 


46 


15-585 


13-889 


12-480 


11-296 


10-292 


9-436 


46 


47 


15-294 


13-662 


12-301 


11-154 


10-178 


9-344 


47 


48 


14-986 


13-419 


12-107 


10-998 


10052 


9-241 


48 


49 


14-654 


13-153 


11-892 


10-823 


9-908 


9-121 


49 


50 


14-303 


12-869 


11-660 


10631 


9-749 


8-987 


50 


51 


13-932 


12-566 


11-410 


10-422 


9-573 


8-838 


51 


52 


13-558 


12-258 


11-154 


10-208 


9-392 


8-684 


52 1 



TABLES. 



395 



TABLE II. {Continued) 

the value of an Annuity on a Single Life, in years and decimal parts 
of years, according to the Carlisle Table of Mortality. 



Ages. 


3 per Cent. 


4 per Cent. 


5 per Cent. 


6 per Cent. 


7 per Cent. 


8 per Cent. 


Ages. 


53 


13-180 


11-945 


10-892 


9-988 


9-205 


8-523 


53 


54 


12-798 


11-627 


10624 


9-761 


9011 


8-356 


54 


55 


12-408 


11-300 


10-347 


9-524 


8-807 


8-179 


55 


56 


12-014 


10-966 


10063 


9-280 


8-595 


7-995 


56 


57 


11-614 


10625 


9-771 


9027 


8-375 


7-802 


57 


58 


11-218 


10-286 


9-478 


8-772 


8-153 


7-606 


58 


59 


10-841 


9963 


9-199 


8-529 


7-940 


7-418 


59 


60 


10-491 


9663 


8-940 


8-304 


7-743 


7-245 


60 


61 


10-180 


9-398 


8-712 


8-108 


7-572 


7-095 


61 


62 


9-875 


9137 


8-487 


7-913 


7-403 


6-947 


62 


63 


9-567 


8-872 


8-258 


7-714 


7-229 


6-795 


63 


64 


9-246 


8-593 


8-016 


7-502 


7-042 


6-630 


64 


65 


8-917 


8-307 


7-765 


7-281 


6-847 


6-457 


65 


66 


8-578 


8-010 


7-503 


7-049 


6-641 


6-272 


66 


67 


8-228 


7-700 


7-227 


6-803 


6-421 


6-075 


67 


68 


7-869 


7-380 


6-941 


6-546 


6-189 


5-866 


68 


69 


7-499 


7-049 


6-643 


6-277 


5-945 


5-643 


69 


70 


7-123 


6709 


6-336 


5-998 


5-690 


5-410 


70 


71 


6-737 


6-358 


6-015 


5-704 


5-420 


5-160 


71 


72 


6-373 


6026 


5-711 


5-424 


5162 


4-922 


72 


73 


6-044 


5725 


5-435 


5-170 


4-927 


4-704 


73 


74 


5-752 


5-458 


5-190 


4-944 


4-719 


4-511 


74 


75 


5-512 


5-239 


4-989 


4-760 


4-549 


4-355 


75 


76 


5-277 


5024 


4-792 


4-579 


4-382 


4-200 


76 


77 


5059 


4-825 


4-609 


4-410 


4-227 


4056 


77 


78 


4-838 


4-622 


4-422 


4-238 


4-067 


3-908 


78 


79 


4-592 


4-394 


4-210 


4-040 


3-883 


3-736 


79 


80 


4-365 


4183 


4-015 


3-858 


3-713 


3-577 


80 


81 


4-119 


3953 


3-799 


3-656 


3523 


3-398 


81 


82 


3-898 


3746 


3-606 


3-474 


3-352 


3-237 


82 


83 


3-672 


3-534 


3-406 


3-286 


3-174 


3-069 


83 


84 


3-454 


3-329 


3-211 


3-102 


2-999 


2-903 


84 


85 


3-229 


3115 


3009 


2-909 


2-815 


2-727 


85 


86 


3033 


2-928 


2-830 


2-739 


2-652 


2571 


86 


87 


2-873 


2-776 


2-685 


2-599 


2-519 


2-448 


87 


88 


2-776 


2-683 


2-597 


2-515 


2-439 


2-366 


88 


89 


2-665 


2-577 


2-495 


2-417 


2-344 


2-276 


89 


90 


2-499 


2-416 


2-339 


2-266 


2-198 


2-133 


90 


91 


2-481 


2-398 


2-321 


2-248 


2-180 


2-115 


91 


92 


2-577 


2-492 


2-412 


2-337 


2-266 


2-198 


92 


93 


2-687 


2-600 


2-518 


2-440 


2-367 


2-297 


93 


94 


2-736 


2-650 


2-569 


2-492 


2-419 


2-350 


94 


95 


2-757 


2-674 


2-596 


2-522 


2-451 


2-383 


95 


96 


2-704 


2-628 


2555 


2-486 


2-420 


2-358 


96 


97 


2-559 


2-492 


2-428 


. 2-368 


2-309 


2-253 


97 


98 


2-388 


2-332 


2-278 


2-227 


2-177 


2-129 


98 


99 


2131 


2-087 


2-045 


2-004 


1-964 


1-926 


99 


100 


1-683 


1-653 


1-624 


1-596 


1-569 


1-543 


100 


101 


1-228 


1-210 


1-192 


1-175 


1-159 


1-142 


101 


102 


0771 


0762 


0-753 


0-744 


0-735 


0-727 


102 


103 


0-324 


0-321 


0-317 


0314 


0312 


0-309 


103 



396 



TABLES. 



TABLE in. 
The present value of One Pound due at the end of any number of years. 



Years. 


3 per 


4 per 


5 per 


6 per 


7 per 


8 per 


9 per 


10 per 


Years. 


1 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 




•9709 


•9615 


•9524 


•9434 


•9346 


•9259 


•9174 


•9091 


1 


2 


•9426 


•9246 


•9070 


•8900 


•8734 


•8573 


•8417 


•8264 


2 


3 


•9151 


•8890 


•8638 


•8396 


•8163 


•7938 


•7722 


•7513 


3 


4 


■8885 


•8548 


•8227 


•7921 


•7629 


•7350 


•7084 


•6830 


4 


5 


•8626 


•8219 


•7835 


•7473 


•7130 


•6806 


•6499 


•6209 


5 


6 


•8375 


•7903 


•7462 


•7050 


•6663 


•6302 


•5963 


•5645 


6 


7 


•8131 


•7599 


•7107 


•6651 


•6227 


•5835 


•5470 


•5132 


7 


8 


•7894 


•7307 


•6768 


•6274 


•5820 


•5403 


•5019 


•4665 


8 


9 


•7664 


•7026 


•6446 


•5919 


•5439 


•5002 


•4604 


•4241 


9 


10 


•7441 


•6756 


•6139 


•5584 


•5083 


•4632 


•4224 


•3855 


10 


11 


•7224 


•6496 


•5847 


•5268 


•4751 


•4289 


•3875 


•3505 


11 


12 


•7014 


•6246 


•5568 


•4970 


•4440 


•3971 


•3555 


•3186 


12 


13 


•6810 


•6006 


•5303 


•4688 


•4150 


•3677 


•3262 


•2897 


13 


14 


•6611 


•5775 


•5051 


•4423 


•3878 


•3405 


•2992 


•2633 


14 


*15 


•6419 


•5553 


•4810 


•4173 


•3624 


■3152 


•2745 


•2394 


15 


16 


•6232 


•5339 


•4581 


•3936 


•3387 


•2919 


•2519 


•2176 


16 


17 


•6050 


•5134 


•4363 


•3714 


•3166 


•2703 


•2311 


•1978 


17 


18 


•5874 


•4936 


•4155 


•3503 


•2959 


•2502 


•2120 


•1799 


18 


19 


•5703 


•4746 


•3957 


•3305 


•2765 


•2317 


•1945 


•1635 


19 


20 


•5537 


•4564 


•3769 


•3118 


•2584 


•2145 


•1784 


•1486 


20 


21 


•5375 


•4388 


•3589 


•2942 


•2415 


•1987 


•1637 


•1351 


21 


22 


•5219 


•4220 


•3418 


•2775 


•2257 


•1839 


•1502 


•1228 


22 


23 


•5067 


•4057 


•3256 


•2618 


•2109 


•1703 


•1378 


•1117 


23 


24 


•4919 


•3901 


-3101 


•2470 


•1971 


•1577 


•1264 


•1015 


24 


25 


•4776 


•3751 


•2953 


•2330 


•1842 


•1460 


•1160 


•0923 


25 


26 


•4637 


•3607 


•2812 


2198 


•1722 


•1352 


•1064 


•0839 


26 


27 


•4502 


•3468 


•2678 


•2074 


•1609 


•1252 


•0976 


•0763 


27 


28 


•4371 


•3335 


•2551 


•1956 


•1504 


•1159 


•0895 


•0693 


28 


29 


•4243 


•3207 


•2429 


•1846 


•1406 


•1073 


•0822 


•0630 


29 


30 


•4120 


•3083 


•2314 


•1741 


•1314 


•0994 


•0754 


•0573 


30 


31 


•4000 


•2965 


•2204 


•1643 


•1228 


•0920 


•0691 


•0521 


31 


32 


•3883 


•2851 


•2099 


•1550 


•1147 


•0852 


•0634 


•0474 


32 


33 


•3770 


•2741 


•1999 


•1462 


•1072 


•0789 


•0582 


•0431 


33 


34 


•3660 


•2636 


•1904 


•1379 


•1002 


•0730 


•0534 


•0391 


34 


35 


•3554 


•2534 


•1813 


•1301 


•0937 


•0676 


•0490 


•0356 


35 


36 


•3450 


•2437 


•1727 


•1227 


•0875 


•0626 


•0449 


•0323 


36 


37 


•3350 


•2343 


•1644 


•1158 


•0818 


•0580 


•0412 


•0294 


37 


38 


•3252 


•2253 


•1566 


•1092 


•0765 


•0537 


•0378 


•0267 


38 


39 


•3158 


•2166 


•1491 


•1031 


•0715 


•0497 


•0347 


•0243 


39 


40 


•3066 


•2083 


•1420 


•0972 


•0668 


•0460 


•0318 


•0221 


40 


41 


•2976 


•2003 


•1353 


•0917 


•0624 


•0426 


•0292 


•0201 


41 


42 


•2890 


•1926 


•1288 


•0865 


•0583 


•0395 


•0268 


•0183 


42 


43 


•2805 


•1852 


•1227 


•0816 


•0545 


•0365 


•0246 


•0166 


43 


44 


•2724 


•1780 


•1169 


•0770 


•0509 


•0338 


•0226 


•0151 


44 


45 


•2644 


•1712 


•1113 


•0727 


•0476 


•0313 


•0207 


•0137 


45 


46 


•2567 


•1646 


•1060 


•0685 


•0445 


•0290 


•0190 


•0125 


46 


47 


•2493 


•1583 ' 


•1009 


•0647 


•0416 


•0269 


•0174 


•0113 


47 


48 


•2420 


•1522 


•0961 


•0610 


•0389 


•0249 


•0160 


•0103 


48 


49 


•2350 


•1463 


•0916 


•0575 


0363 


•0230 


•0147 


•0094 


49 


50 


•2281 


•1407 


•0872 


•0543 


•0339 


•0213 


•0134 


•0085 


50 



* Example— £\ due at the end of 15 years, at 3 per cent., is worth, in present money, 
•6419, or 125. 1(M— At 4 per cent., "5553, or lis. l%d.— At 5 per cent., -4810, or 9s. l%d.— At 
6 per cent., "4173, or 8s. 4%d — At 7 per cent., -3624, or 7s. 3d.— At 8 per cent., -3152, or 
6s. 3%d.— At 9 per-cent., -2745, or 5s. 6c?.— At 10 per cent., '2394, or 4s. 9%d. 

To read the Table for £10 instead of £1, all that is required is to place the decimal point 
(•) one figure to the right : thus, £10 due at the end of 15 years, at 3 per cent., is worth, in 
present money, 6'419, or £6 8s. 4%d. For £100, place the decimal point two figures to the 
right. The example would then read 6419, or £64 3s. 10X<2. 



TABLES. 



397 



TABLE III. (Continued) 
The present value of One Pound due at the end of any number of years. 





3 per 


4 per 


5 per 


6 per 


7 per 


8 per 


9 per 


10 per 


Years. 




Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 




51 


•2215 


•1353 


•0831 


•0512 


•0317 


■0197 


•0123 


•0077 


51 


52 


•2150 


•1301 


•0791 


•0483 


•0297 


•0183 


•0113 


•0070 


52 


53 


•2088 


•1251 


0753 


•0456 


•0277 


•0169 


•0104 


•0064 


53 


54 


•2027 


•1203 


•0717 


•0430 


•0259 


•0157 


•0095 


•0058 


54 


55 


•1968 


•1157 


•0683 


•0406 


•0242 


•0145 


•0087 


•0053 


55 


56 


•1910 


•1112 


•0651 


•0383 


•C226 


•0134 


•0080 


•0048 


56 


57 


•1855 


•1069 


•0620 


•0361 


•0211 


•0124 


•0074 


•0044 


57 


58 


•1801 


•1028 


•0590 


•0341 


•0198 


•0115 


•0067 


•0040 


58 


59 


•1748 


•0989 


•0562 


•0321 


•0185 


•0107 


•0062 


•0036 


59 


60 


•1697 


•0951 


•0535 


•0303 


•0173 


•0099 


•0057 


•0033 


60 


61 


•1648 


•0914 


•0510 


•0286 


•0161 


•0091 


•0052 


•0030 


61 


62 


•1600 


•0879 


•0486 


•0270 


•0151 


•0085 


•0048 


•0027 


62 


63 


•1553 


•0845 


•0-162 


0255 


•0141 


•0078 


•0044 


•0025 


63 


64 


•1508 


•0813 


•0440 


•0240 


•0132 


•0073 


•0040 


■0022 


64 


65 


•1464 


•0781 


•0419 


•0227 


•0123 


•0067 


•0037 


•0020 


65 


66 


•1421 


•0751 


•0399 


•0214 


•0115 


•0062 


•0034 


•0019 


66 


67 


•1380 


0722 


•0380 


•0202 


•0107 


•0058 


•0031 


•0017 


67 


68 


•1340 


•0695 


•0362 


•0190 


•0100 


•0053 


•0029 


•0015 


68 


69 


•1301 


•0668 


•0345 


•0179 


•0094 


•0049 


■0026 


•0014 


69 


70 


•1263 


•0642 


•0329 


•0169 


•0088 


•0046 


•0024 


•0013 


70 


71 


•1226 


•0617 


•0313 


•0160 


•0082 


•0042 


•0022 


•0012 


71 


72 


•1190 


•0594 


•0298 


•0151 


•0077 


•0039 


•0020 


•0010 


72 


73 


•1156 


•0571 


•0284 


•0142 


•0072 


•0036 


•0019 


•0010 


73 


74 


•1122 


•0549 


•0270 


•0134 


•0067 


•0034 


•0017 


•0009 


74 


75 


•1089 


•0528 


•0258 


•0126 


•0063 


•0031 


•0016 


•0008 


75 


76 


•1058 


•0508 


•0245 


•0119 


•0058 


•0029 


•0014 


•0007 


76 


77 


•1027 


•0488 


•0234 


•0113 


•0055 


•0027 


•0013 


•0006 


77 


78 


•0997 


•0469 


•0222 


•0106 


•0051 


•0025 


•0012 


•0006 


78 


79 


•0968 


•0451 


•0212 


•0100 


•0048 


•0023 


•0011 


•0005 


79 


*80 


•0940 


•0434 


•0202 


•0095 


•0045 


■0021 


•0010 


•0005 


80* 


81 


•0912 


•0417 


•0192 


•0089 


■0042 


•0020 


•0009 


•0004 


81 


82 


•0886 


•0401 


•0183 


•0084 


•0039 


•0018 


•0009 


•0004 


82 


83 


•0860 


•0386 


•0174 


•0079 


•0036 


•0017 


•0008 


•0004 


83 


84 


•0835 


•0371 


•0166 


•0075 


•0034 


•0016 


•0007 


•0003 


84 


85 


•0811 


•0357 


•0158 


•0071 


•0032 


•0014 


•0007 


•0003 


85 


86 


•0787 


•0343 


•0151 


•0067 


•0030 


•0013 


.0006 


•0003 


86 


87 


•0764 


•0330 


•0143 


•0063 


•0028 


•0012 


•0006 


•0003 


87 


88 


•0742 


•0317 


•0137 


•0059 


•0026 


•0011 


•0005 


•0002 


88 


89 


•0720 


•0305 


•0130 


•0056 


•0024 


•0011 


•0005 


•0002 


89 


90 


•0699 


•0293 


•0124 


•0053 


•0023 


•0010 


0004 


•0002 


90 


91 


•0679 


•0282 


•0118 


•0050 


•0021 


■0009 


•0004 


•0002 


91 


92 


•0659 


•0271 


0112 


•0047 


•0020 


•0008 


•0004 


•0002 


92 


93 


•0640 


•0261 


•0107 


•0044 


•0019 


•0008 


•0003 


•0001 


93 


94 


•0621 


•0214 


•0102 


•0042 


•0017 


•0007 


•0003 


•0001 


94 


95 


•0603 


•0241 


•0097 


•0039 


•0016 


•0007 


•0003 


•0001 


95 


96 


•0586 


•0232 


•0092 


•0037 


•0015 


•0006 


•0003 


•0001 


96 


97 


•0569 


•0223 


•0088 


•0035 


•0014 


0006 


•0002 


•0001 


97 


98 


•0552 


•0214 


•0084 


•0033 


•0013 


•0005 


•0002 


•0001 


98 


99 


•0536 


•0206 


•0080 


0031 


•0012 


•0005 


•0002 


•0001 


99 


100 


•0520 


•0198 


0076 


•0029 


•0012 


•0005 


•0002 


•0001 


100 



* Example.— £1 due at the end of 80 years, at 3 per cent., is worth, in present money, 
•0940, or Is. l^d.—At 4 per cent., -0434, or \§%d.— At 5 per cent., '0202, or M.— At C per 
cent., -0095, or 2%d — At 7 per cent., -0045, or Id.— At 8 per cent., -0021, or %d — At 9 per 
cent., -0010, or %<t.— At 10 per cent., -0005, or %d. 



398 



TABLES. 



TABLE IV. 
The Annuity which. One Pound will purchase for any number of years. 



Tears. 


3 per 


4 per 


5 per 


6 per 


7 per 


8 per 


9 per 


10 per 


Years. 




Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 




1 


1-0300 


1-0400 


1-0500 


1-0600 


1-0700 


1-0800 


1-0900 


1-1000 


1 


2 


•5226 


•5302 


•5378 


•5454 


•5531 


•5608 


•5685 


•5762 


2 


3 


•3535 


•3603 


•3672 


•3741 


•3811 


•3880 


•3951 


•4021 


3 


4 


•2690 


•2755 


•2820 


•2886 


•2952 


•3019 


•3087 


•3155 


4 


5 


•2184 


•2246 


•2310 


•2374 


•2439 


•2505 


•2571 


•2638 


5 


6 


•1846 


•1908 


•1970 


•2034 


•2098 


•2163 


•2229 


•2296 


6 


7 


•1605 


•1666 


•1728 


•1791 


•1856 


•1921 


•1987 


•2051 


7 


8 


•1425 


•1485 


•1547 


•1610 


•1675 


•1740 


•1807 


•1874 


8 


9 


•1284 


•1345 


•1407 


•1470 


•1535 


•1601 


•1668 


•1736 


9 


10 


•1172 


•1233 


•1295 


•1359 


•1424 


•1490 


■1558 


•1627 


10 


11 


•1081 


•1141 


•1204 


•1268 


•1334 


•1401 


•1469 


•1540 


11 


12 


•1005 


•1066 


•1128 


•1193 


•1259 


•1327 


•1397 


•1468 


12 


13 


•0940 


•1001 


•1065 


•1130 


•1197 


•1265 


•1336 


■1408 


13 


14 


•0885 


•0947 


•1010 


•1076 


•1143 


•1213 


•1284 


•1358 


14 


*15 


•0837 


•0899 


•0963 


•1030 


•1098 


•1168 


•1241 


•1315 


15* 


16 


•0796 


•0858 


•0923 


•0990 


•1059 


•1130 


•1203 


•1278 


16 


17 


•0760 


•0822 


•0887 


■0954 


•1024 


•1096 


•1170 


•1247 


17 


18 


•0727 


•0790 


•0855 


•0924 


•0994 


•1067 


•1142 


•1219 


18 


19 


•0698 


•0761 


•0827 


•0896 


•0968 


•1041 


•1117 


•1195 


19 


20 


•0672 


•0736 


•0802 


•0872 


•0944 


•1019 


•1095 


•1175 


20 


21 


•0649 


•0713 


•0780 


•0850 


•0923 


•0998 


•1076 


•1156 


21 


22 


•0627 


•0692 


•0760 


•0830 


•0904 


•0980 


•1059 


•1140 


22 


23 


•0608 


•0673 


•0741 


•0813 


•0887 


0964 


•1044 


•1126 


23 


24 


•0590 


•0656 


•0725 


•0797 


•0872 


•0950 


•1030 


•1118 


24 


25 


•0574 


•0640 


•0710 


•0782 


■0858 


•0937 


•1018 


•1102 


25 


26 


•0559 


•0626 


•0696 


•0769 


•0846 


•0925 


•1007 


•1092 


26 


27 


•0546 


•0612 


•0683 


•0757 


•0834 


•0914 


•0997 


•1083 


27 


28 


•0533 


•0600 


•0671 


•0746 


•0824 


•0905 


•0989 


•1075 


28 


29 


•0521 


•0589 


•0660 


•0736 


•0814 


•0896 


•0981 


•1067 


29 


30 


•0510 


•0578 


•0651 


•0726 


•0806 


•0888 


•0973 


•1061 


30 


31 


•0500 


•0569 


•0641 


•0718 


•0798 


•0881 


•0967 


•1055 


31 


32 


•0490 


•0559 


•0633 


•0710 


•0791 


•0875 


•0961 


•1050 


32 


33 


•0482 


•0551 


•0625 


•0703 


•0784 


•0869 


•0956 


•1045 


33 


34 


•0473 


•0543 


•0618 


•0696 


•0778 


•0863 


•0951 


•1041 


34 


35 


•0465 


.0536 


•0611 


•0690 


•0772 


•0858 


•0946 


•1037 


35 


36 


•0458 


•0529 


•0604 


•0684 


•0767 


.0853 


•0942 


•1033 


36 


37 


•0451 


•0522 


•0598 


•0679 


•0762 


•0849 


•0939 


•1030 


37 


38 


•0445 


•0516 


•0593 


•0674 


•0758 


•0845 


•0935 


•1027 


38 


39 


•0438 


•0511 


•0588 


•0669 


•0754 


•0842 


•0932 


•1025 


39 


40 


•0433 


•0505 


•0583 


•0665 


•0750 


•0839 


•0930 


•1023 


40 


41 


•0427 


•0500 


•0578 


•0661 


•0747 


•0836 


•0927 


•1020 


41 


42 


•0422 


•0495 


•0574 


•0657 


•0743 


•0833 


•0925 


•1019 


42 


43 


•0417 


•0491 


•0570 


•0653 


•0740 


•0830 


•0923 


•1017 


43 


44 


•0412 


•0487 


•0566 


•0650 


•0738 


•0828 


•0921 


•1015 


44 


45 


•0408 


•0483 


•0563 


•0647 


•0734 


■0826 


•0919 


•1014 


45 


46 


•0404 


•0479 


•0559 


•0644 


•0733 


•0824 


•0917 


•1013 


46 


47 


•0400 


•0475 


•0556 


•0641 


•0730 


•0822 


•0916 


1 -1011 


47 


48 


•0396 


•0472 


•0553 


•0639 


•0728 


•0820 


•0915 


| -1010 


48 


49 


•0392 


•0469 


•0550 


•0637 


•0726 


•0819 


•0913 


•1009 


49 


50 


•0389 


•0466 


•0548 


•0634 


0725 


•0817 


•0912 


•1009 


50 



* Example.— £1 will purchase an Annuity for 15 years, at 3 per cent., of "0337, or Is. 8d.— 
At 4 per cent., -0899, or Is. 9%d.— At 5 per cent., -0963, or Is. lit/.— At 6 per cent.. -1030, or 
2.?. O^d.—At 1 per cent., '1098, or 2s. 2Kd.— At 8 per cent., -1168, or 2s. 4d— At 9 per cent.. 
•1241, or 2s. 5%d.— At 10 per cent., '1315, or 2s. 7^tf. 



TABLES. 



399 



TABLE IV. (Continued.) 
The Annuity which. One Pound will purchase for any Number of Tears. 



c 

Years. 


3 per 


4 per 


5 per 


6 per 


7 per 


8 per 


9 per 


10 per 


Years. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


51 


•0385 


•0463 


•0545 


•0632 


•0723 


•0816 


•0911 


•1008 


51 


52 


•0382 


•0460 


•0543 


•0630 


•0721 


•0815 


•0910 


•1007 


52 


53 


•0379 


•0457 


•0541 


•0629 


•0720 


•0814 


•0909 


•1006 


53 


54 


•0376 


•0455 


0539 


•0627 


•0719 


•0813 


•0909 


1006 


54 


55 


•0373 


•0452 


•0537 


0625 


•0717 


•0812 


•0908 


•1005 


55 


56 


•0370 


0450 


•0534 


•0824 


•0716 


•0810 


•0907 


• 1005 


56 


57 


•0368 


•0448 


•0533 


•0623 


•0715 


•0810 


•0907 


•1004 


57 


58 


•0366 


•0446 


•0531 


•0621 


•0714 


•0809 


•0906 


•1004 


58 


59 


•0364 


•0444 


0530 


•0820 


•0713 


•0809 


•0906 


•1004 


59 


60 


•0361 


•0442 


•0528 


•0619 


•0712 


0808 


•0905 


•1003 


60 


61 


•0359 


•0440 


•0527 


•0618 


•0711 


•0807 


•0905 


•1003 


61 


62 


•0357 


•0439 


0526 


•0817 


•0710 


•0807 


•0904 


•1003 


62 


63 


•0355 


•0437 


•0524 


•0616 


•0710 


•0806 


•0904 


•1002 


63 


64 


•0353 


•0435 


•0523 


•0615 


•0709 


•0808 


•0904 


•1002 


64 


65 


•0351 


•0434 


•0522 


•0614 


•0708 


•0805 


•0903 


•1002 


65 


66 


•0350 


•0432 


•0521 


•0813 


•0708 


•0805 


•0903 


•1002 


66 


67 


•0348 


•0431 


•0520 


•0812 


•0707 


•0805 


•0903 


•1002 


67 


68 


•0346 


•0430 


•0519 


•0612 


•0707 


•0804 


•0903 


•1002 


68 


69 


•0345 


•0429 


•0518 


•0811 


•0708 


•0804 


•0902 


•1001 


69 


*70 


•0343 


•0427 


•0517 


•0810 


•0708 


■0804 


•0902 


•1001 


70* 


71 


•0342 


•0426 


•0516 


•0610 


•0706 


•0803 


•0902 


•1001 


71 


72 


•0341 


•0425 


•0515 


•0609 


•0705 


•0803 


•0902 


•1001 


72 


73 


•0339 


•0424 


•0515 


•0809 


•0705 


•0803 


•0902 


•1001 


73 


74 


•0338 


•0423 


•0514 


•0608 


•0705 


•0803 


•0902 


•1001 


74 


75 


•0337 


•0422 


•0513 


•0608 


•0704 


•0802 


•0901 


•1001 


75 


76 


•0335 


•0421 


•0513 


•0807 


•0704 


.0802 


•0901 


•1001 


76 


77 


•0334 


•0421 


•0512 


•0607 


•0704 


•0802 


•0901 


•1001 


77 


78 


•0333 


•0420 


•0511 


•0606 


•0704 


•0802 


•0901 


•1001 


78 


79 


•0332 


•0419 


•0511 


•0606 


•0703 


•0802 


•0901 


•1001 


79 


80 


•0331 


•0418 


•0510 


•0608 


•0703 


•0802 


•0901 


•1000 


80 


81 


•0330 


•0417 


•0510 


•0605 


•0703 


•0802 


•0901 


•1000 


81 


82 


•0329 


•0417 


•0509 


•0805 


•0703 


•0801 


•0901 


•1000 


82 


83 


•0328 


•0416 


•0509 


•0605 


•0703 


•0801 


•0901 


•1000 


83 


84 


•0327 


•0415 


•0508 


•0605 


•0702 


•0801 


•0901 


•1000 


84 


85 


•0326 


■0415 


•0508 


•0604 


•0702 


•0801 


•0901 


•1000 


85 


86 


•0326 


•0414 


•0508 


•0804 


•0702 


•0801 


•0901 


•1000 


86 


87 


•0325 


•0414 


•0507 


•0804 


•0702 


•0801 


•0900 


•1000 


87 


88 


•0324 


•0413 


•0507 


•0604 


•0702 


•0801 


•0900 


•1000 


88 


89 


•0323 


•0413 


•0507 


•0603 


•0702 


•0801 


0900 


•1000 


89 


90 


•0323 


•0412 


•0506 


•0803 


•0702 


•0801 


•0900 


•1000 


90 


91 


•0322 


•0412 


•0508 


•0803 


•0701 


•0801 


•0900 


•1000 


91 


92 


•0321 


•0411 


•0506 


•0803 


•0701 


•0801 


•0900 


•1000 


92 


93 


•0321 


•0411 


•0505 


•0603 


•0701 


•0801 


•0900 


1000 


93 


94 


•0320 


•0410 


•0505 


•0803 


•0701 


•0801 


•0900 


•1000 


94 


95 


•0319 


•0410 


•0505 


•0602 


•0701 


•0801 


•0900 


•1000 


95 


96 


•0319 


•0409 


•0505 


•0602 


•0701 


•0801 


•0900 


•1000 


96 


97 


•0318 


•0409 


•0504 


•0602 


•0701 


•0801 


•0900 


•1000 


97 


98 


•0318 


•0409 


•0504 


•0602 


•0701 


•0801 


•0900 


•1000 


98 


99 


•0317 


•0408 


•0504, 


•0802 


•0701 


•0801 


•0900 


•1000 


99 


100 


•0316 


•0408 


•0504, 


•0802 


•0701 


•0801 


•0900 


•1000 


100 


Perpetuity! 


•0300 


•0400 


•0500[ 


0800 


•0700 


.0800 


•0900 


•1000 


Perpetuity 



* Example.— £1 will purchase an annuity for 70 years of (3 per cent.) "0343, or 8%d. — At 4 
per cent, of "0427, or 103^.— At 5 per cent, of '0517, or Is. O^d.— At 6 per cent, of -0610, or 
Is. 2%d— At 7 per cent, of '0706, or Is. 5cl— At 8 per cent, of '0804, or Is. 7X<2.— At 9 per 
cent, of -0902, or Is. 9Xd.-rAt 10 per cent, of -1001, or 2s. ' ' ' ' 



400 



TABLES. 



TABLE No. V. 

The amount of One Pound for any Number of Years. 



Tears. 


3 per Cent. 


4 per Cent. 


5 per Cent. 


6 per Cent. 


8 per Cent. 


10 per Cent. 


Years. 


1 


1-0300 


1-0400 


1-0500 


1-0600 


1-0800 


1-1000 


1 


2 


1-0609 


1-0816 


1-1025 


1-1236 


1-1664 


1-2100 


2 


3 


1-0927 


1-1249 


1-1576 


1-1910 


1-2597 


1-3310 


3 


4 


1-1255 


1-1699 


1-2155 


1-2625 


1-3605 


1-4641 


4 


5 


1-1593 


1-2167 


1-2763 


1-3382 


14693 


1-6105 


5 


6 


1-1941 


1-2653 


1-3401 


1-4185 


1-5869 


1-7716 


6 


7 


1-2299 


1-3159 


1-4071 


1-5036 


1-7138 


1-9487 


7 


8 


1-2668 


1-3686 


1-4775 


1-5938 


1-8509 


2-1436 


8 


9 


1-3048 


1-4233 


1-5513 


1-6895 


1-9990 


2-3579 


9 


10 


1-3439 


1-4802 


1-6289 


1-7908 


2-1589 


2-5937 


10 


11 


1-3842 


1-5395 


1-7103 


1-8983 


2-3316 


2-8531 


11 


12 


1-4258 


1-6010 


1-7959 


2-0122 


2-5182 


3-1384 


12 


13 


1-4685 


1-6651 


1-8856 


2-1329 


2-7196 


3-4523 


13 


14 


1-5126 


1-7317 


1-9799 


2-2609 


2-9372 


3-7975 


14 


*15 


1-5580 


1-8009 


2-0789 


2-3966 


3-1722 


4-1773 


15* 


16 


1-6047 


1-8730 


2-1829 


2-5404 


3-4259 


4-5950 


16 


17 


1-6528 


1-9479 


2-2920 


2-6928 


3-7000 


5-0545 


17 


18 


1-7024 


2-0258 


2-4066 


2-8543 


3-9960 


5-5599 


18 


19 


1-7535 


2-1068 


2-5270 


30256 


4-3157 


6-1159 


19 


20 


1-8061 


2-1911 


2-6533 


3-2071 


4-6610 


6-7274 


20 


21 


1-8603 


2-2788 


2-7860 


3-3996 


5-0338 


7-4002 


21 


22 


1-9161 


2-3699 


2-9253 


3-6035 


5-4365 


8-1403 


22 


23 


1-9736 


2-4647 


30715 


3-8197 


5-8715 


8-9543 


23 


24 


2-0328 


2-5633 


32251 


4-0489 


6-3412 


9-8497 


24 


25 


2-0938 


2-6658 


3-3864 


4-2919 


6-8485 


108347 


25 


26 


2-1566 


2-7725 


3-5557 


4-5494 


7-3964 


11-9182 


26 


27 


2-2213 


2-8834 


3-7335 


4-8223 


7-9881 


13-1100 


27 


28 


2-2879 


2-9987 


3-9202 


51117 


8-6271 


14-4210 


28 


29 


2-3566 


3-1187 


4-1162 


5-4184 


9-3173 


15-8631 


29 


30 


2-4273 


3-2434 


4-3219 


5-7435 


100627 


17-4494 


30 


31 


2-5001 


3-3731 


4-5380 


6-0881 


10-8677 


191943 


31 


32 


25751 


3-5081 


4-7649 


6-4534 


11-7371 


21-1138 


32 


33 


2-6523 


3-6484 


5-0032 


6-8406 


12-6761 


23-2252 


33 


34 


2-7319 


3-7943 


5-2533 


7-2511 


13-6902 


25-5477 


34 


35 


2-8139 


3-9461 


5-5160 


7-6861 


14-7853 


28-1024 


35 


36 


2-8983 


4-1039 


5-7918 


8-1473 


15-9682 


30-9127 


36 


37 


2.9852 


4-2681 


6-0814 


8-6368 


17-2456 


340039 


37 


38 


3-0748 


4-4388 


6-3855 


9-1543 


18-6253 


37-4043 


38 


39 


31670 


4-6164 


6-7048 


9-7035 


20-1153 


41-1448 


39 


40 


3-2620 


4-8010 


7-0400 


10-2857 


21-7245 


45-2593 


40 


41 


3-3599 


4-9931 


7-3920 


10-9029 


23-4625 


49-7852 


41 


42 


3-4607 


5-1928 


7-7616 


11-5570 


25-3395 


54-7637 


42 


43 


35645 


5-4005 


8-1497 


12-2505 


27-3666 


60-2401 


43 


44 


36715 


5-6165 


8-5572 


12-9855 


29-5560 


66-2641 


44 


45 


3-7816 


5-8411 


8-9850 


13-7646 


31-9204 


72-8905 


45 


46 


3-8950 


6-0748 


94343 


14-5905 


34-4741 


80-1795 


46 


47 


40119 


6-3178 


9-9060 


15-4659 


37-2320 


881975 


47 


48 


41323 


6-5705 


10-4013 


16-3939 


40-2106 


97-0172 


48 


49 


4-2562 


6-8333 


109213 


17-3775 


43-4274 


106.7190 


49 


50 


4-3839 


7-1067 


11-5674 


18-4202 


469016 


117-3909 


50 



* Example.— £1 in 15 years, at 3 per cent., will amount to 1'5580, or £1 Us. 2d — At 4 per 
cent., 1-8009, or £1 16s.— At 5 per cent., 2-0789, or £2 Is. 7tf.— At 6 per cent., 2"3966, or £2 7s. 
lid.— At 7 per cent., 2*7590, or £2 15s. 2d.— At 8 per cent., 3'1722, or £3 3s. 5c?.— At 9 per 
cent., 3-6425, or £3 12s. 10d— At 10 per cent., 4-1773, or £4 3s. Qd. 



TABLES. 



401 



TABLE No. V. (Continued.) 
The amount of One Pound for any Number of Years. 



Years. 


3 per Cent. 


4 per Cent. 


5 per Cent. 


6 per Cent. 


8 per Cent. 


10 per Cent. 


Years. 


51 


4-5154 


7-3910 


12-0408 


195254 


50-6537 


1291299 


51 


52 


4-6509 


7-6866 


12-6428 


206969 


54-7060 


1420429 


52 


53 


47904 


79941 


13-2749 


21-9387 


59-0825 


156-2472 


53 


54 


4-9341 


8-3138 


13-9387 


23-2550 


63-8091 


1718719 


54 


55 


5-0821 


8-6464 


14-6356 


24-6503 


68-9139 


189-0591 


55 


56 


5-2346 


8-9922 


15-3674 


26-1293 


74-4270 


207-9651 


56 


57 


5-3917 


8-3519 


16-1358 


27.6971 


€0-3811 


228-7616 


57 


58 


5-5534 


9-7260 


16-9426 


29-3589 


86-8116 


251-6377 


58 


59 


5-7200 


101150 


17-7897 


31-1205 


93-7565 


276-8015 


59 


60 


58916 


105196 


18-6792 


32-9877 


101-2571 


304-4816 


60 


61 


6-0684 


109404 


19-6131 


34-9670 


109-3576 


334-9298 


61 


62 


6-2504 


11-3780 


20-5938 


37-0650 


118-1062 


368-4228 


62 


63 


6-4379 


11-8332 


21-6235 


39-2889 


1275547 


405-2651 


63 


64 


6-6311 


12-3065 


22-7047 


41-6462 


137-7591 


445-7916 


64 


65 


6-8300 


12-7987 


23-8399 


44-1450 


148-7798 


490-3707 


65 


66 


7-0349 


13-3107 


25-0319 


46-7937 


160-6822 


539-4078 


66 


67 


7-2460 


138431 


26-2835 


49-6013 


173-5368 


593-3486 


67 


68 


7-4633 


14-3968 


27-5977 


52-5774 


187-4198 


652-6834 


68 


69 


7-6872 


149727 


28-9775 


55-7320 


202-4133 


717-9518 


69 


*70 


7-9178 


15-5716 


304264 


59-0759 


218-6064 


789 7470 


70* 


71 


8-1554 


16-1945 


31-9477 


62-6205 


236-0949 


868-7217 


71 


72 


8-4000 


16-8423 


33-5451 


66-3777 


254.9825 


955-5938 


72 


73 


8-6520 


175160 


35-2224 


70-3604 


275-3811 


1051-1532 


73 


74 


8-9116 


18-2166 


36-9835 


74-5820 


297-4116 


1156-2685 


74 


75 


9-1789 


189453 


38-8327 


79-0569 


321-2045 


1271-8954 


75 


76 


9-4543 


19-7031 


40-7743 


83-8003 


346-9009 


1399.0849 


76 


77 


9-7379 


20-4912 


42-8130 


88-8284 


374-6530 


1538-9934 


77 


78 


100301 


21-3108 


44-9537 


94-1581 


404-6252 


1692-8927 


78 


79 


10-3310 


22-1633 


47-2014 


99-8075 


436-9952 


1862-1820 


79 


80 


10-6409 


23-0498 


49-5614 


105-7960 


471-9548 


2048-4002 


80 


81 


10-9601 


23-9718 


52-0395 


112-1438 


509-7112 


2253-2402 


81 


82 


11-2889 


24-9307 


54-6415 


118-8724 


550-4881 


24785643 


82 


83 


11-6276 


25 9279 ' 


57-3736 


126-0047 


594-5272 


2726-4207 


83 


84 


11-9764 


26-9650 


60-2422 


133-5650 


6420893 


2999-0628 


84 


85 


12-3357 


280436 


63-2544 


141-5789 


693-4565 


3298-9690 


85 


86 


12-7058 


29-1653 


66-4171 


150-0736 


748-9330 


3628-8659 


86 


87 


13-0870 


30-3320 


69-7379 


1590781 


808-8476 


3991-7525 


87 


88 


13-4796 


31-5452 


73-2248 


168-6227 


873-5555 


4390-9278 


88 


89 


13-8839 


32-8071 


76-8861 


178-7401 


943-4399 


4830-0206 


89 


90 


14-3005 


341193 


80-7304 


189-4645 


1018-9154 


53130226 


90 


91 


14-7295 


35-4841 


84-7669 


200-8324 


1100-4283 


5844-3249 


91 


92 


15-1714 


36-9035 


89-0052 


212-8823 


1188-4626 


6428-7574 


92 


93 


15-6265 


38-3796 


93-4555 


225-6553 


1283-5396 


7071-6331 


93 


94 


160953 


39-9148 


98-1283 


239-1946 


1386-2227 


7778-7964 


94 


95 


16-5782 


41-5114 


1030347 


253-5463 


1497-1205 


8556-6760 


95 


96 


17-0755 


43-1718 


108-1864 


268-7590 


1616-8902 


9412-3437 


96 


97 


17-5878 


44-8987 


1135957 


284-8846 


17462414 


10353-578 


97 


98 


18-1154 


46-6947 


1192755 


301-9776 


1885-9407 


11388-936 


98 


99 


18-6589 


48-5625 


125-2393 


320-0963 


2036-8160 


12527-829 


99 


100 


19-2186 


50-5049 


131-5013 


339-3021 


2199-7613 


13780-612 


100 



* Example. — £1 accumulated for TO years, at 3 per cent, compound interest, will amount to 
7 9178, or £7 18s. 4%d. ; at 4 per cent, to 15-5716, or £15 lis. by z d. ; at 6 per cent, to 59-0759, 
or £59 Is. M. ; at 8 per cent, to 202-4133, or £202 85. i^d. ; or at 10 per cent, to 789-740, or 
£789 14s. ll%d. 



402 



TABLES. 



TABLE VI. 

The amount of One Pound per Annum in any number of Years. 



Years. 


i per Cent. 


4 per Cent. 


5 per Cent. 


3 per Cent. 8 per Cent. 


10 per Cent. 


Years. 


1 


1-0000 


1.0000 


1-0000 


1-0000 1-0000 


1-0000 


1 


2 


2-0300 


2-0400 


2-0500 


2-0600 2-0800 


2-1000 


2 


3 


3-0909 


3-1216 


31525 


3-1836 


3-2464 


33100 


3 


4 


4-1836 


4-2464 


4-3101 


4 3746 


4-5061 


4-6410 


4 


5 


5-3091 


5-4163 


5.5256 


5-6371 


5-8666 


6-1051 


5 


6 


6-4684 


6-6330 


6-8019 


6-9753 


7-3359 


7-7156 


6 


7 


7-6625 


7-8983 


8-1420 


8-3938 


8-9228 


9-4872 


7 


8 


8-8923 


9-2142 


9-5491 


9-8975 


10-6366 


11-43591 


8 


9 


10-1591 


10-5828 


11-0266 


11-4913 


12-4876 


13-5795 


9 


10 


11-4638 


12-0061 


12-5779 


13-1808 


14-4866 


15-9374 


10 


11 


12-8078 


13-4864 


14-2068 


14-9716 


16-6455 


18-5312 


11 


12 


14-1920 


150253 


15-9171 


16-8699 


18-9771 


21-3843 


12 


13 


15-6178 


16-6268 


17-7130 


18-8821 


21-4952 


24-5227 


13 


14 


17-0863 


182919 


19-5986 


21-0151 


24-2149 


27-9750 


14 


*15 


18-5989 


20-0236 


21-5786 


23-2760 


27-1521 


31-7725 


15* 


16 


201569 


21-8245 


23-6575 


25-6725 


30-3243 


35-9497 


16 


17 


21-7616 


23-6975 


258403 


28-2129 


33-7502 


40-5447 


17 


18 


23-4144 


25-6454 


28-1324 


30-9057 


37-4502 


45-5992 


18 


19 


25-1169 


27-6712 


30-5390 


33-7600 


41-4463 


51-1591 


19 


20 


26-8704 


29-7781 


330660 


36-7856 


45-7620 


57-2750 


20 


21 


28-6765 


31-9692 


35-7193 


39-9927 


50-4229 


64-0025 


21 


22 


30-5368 


34-2480 


385052 


43-3923 


55-4568 


71-4027 


22 


23 


32-4529 


36-6179 


41-4305 


46-9958 


608963 


79-5430 


23 


24 


34-4265 


39-0826 


44.5020 


50-8156 


66-7648 


88-4973 


24 


25 


36-4593 


41-6459 


47-7271 


54-8645 


73-1059 


98-3471 


25 


26 


38-5530 


44-3117 


51-1135 


59-1564 


79-9544 


109-1818 


26 


27 


40-7096 


47-0842 


546691 


637058 


87-3508 


121-0999 


27 


28 


42 9309 


49-9676 


58-4026 


68-5281 


95-3388 


134-2099 


28 


29 


45-2189 


52-9663 


62.3227 


73-6398 


103-9659 


148-6309 


29 


30 


47-5754 


560849 


66-4388 


79-0582 


113-2332 


164-4940 


30 


31 


50-0027 


59-3283 


70-7608 


84-8017 


123-3459 


181-9434 


31 


32 


52-5028 


62-7015 


75-2988 


90-8898 


134-2135 


201-1378 


32 


33 


55-0778 


662095 


80-0638 


97-3432 


145-9506 


222-2515 


33 


34 


57-7302 


69 8579 


85-0670 


104-1838 


1586267 


245-4767 


34 


35 


60-4621 


73-6522 


90-3203 


111-4348 


172-3168 


271-0244 


35 


36 


63-2759 


77-5983 


95-8363 


119-1209 


187-1021 


299-1268 


36 


37 


661742 


81-7022 


101-6281 


127-2681 


203-0703 


330-0395 


37 


38 


69-1594 


85-9703 


107-7095 


1359042 


220-3159 


364-0434 


38 


39 


72-2342 


90-4091 


114-0950 


145-0585 


238-9412 


401-4478 


39 


40 


75-4012 


95-0255 


120-7998 


154-7620 


2590565 


442-5926 


40 


41 


78-6633 


99-8265 


127-8398 


165 0477 


1 280-7810 


487-8518 


41 


42 


82-0232 


1048195 


135-2318 


175-9505 


! 304-2435 


537-6370 


42 


43 


85-4839 


110-0124 


142-9933 


187-5075 


3295830 


592-4007 


43 


44 


89-0484 


115-4128 


151-1430 


199-7580 


356-9496 


652-6408 


44 


45 


927199 


121-0294 


1 159-7002 


212-7435 


386-5056 


718-9048 


45 


46 


96-5015 


126-870C 


1 168-6852 


226-5081 


418-4261 


791-7953 


46 


47 


100-3965 


1329454 


t 178-1194 


241-0986 


4529002 


871-9749 


47 


48 


104-4084 


= 139263S 


* 188-0254 


256-5645 


4901322 


9601723 


48 


49 


108-540f 


145-833 r 


' 198-4269 


272-9584 


536-3429 


1057-1896 


49 


50 


112-796£ 


152-6671 


209-348C 


290-3359 573-7702 


1163-9085 


50 



* Example.— £1 per annum, in 15 years, at 3 per cent., will amount to 18-5989, or £18 lis. 
ll%d.— At 4 per cent., 20-0236, or £20 0*. 5%d.— At 5 per cent., 21-5786, or £21 lis. GXd.— At 
6 per cent., 23-2760, or £23 5s. <6}£d.— At 8 per cent., 27-1521, or £27 3s. 0%d. At 10 per cent. , 
31-7725, or £31 15s. 5%d. 



TABLES. 



403 



TABLE VI. (Continued.) 
The amount of One Pound per Annum in any number of years. 



i 

V 


3 per Cent. 


4 per Cent. 


5 per Cent. 

I 


6 per Cent. 


8 per Cent. 


10 per Cent. 


m 
H 


51 117-1808 


159-7738 


220-8154 


308-7561 


620-6718 


1281-2994 


51 


52 121-6962 


i 1671647 


232-8562 


328-2814 


671-3255 


1410-4293 52 


53 


126-3471 


174-8513 


245-4990 


348-9783 


726-0316 


1552-47231 53 


54 


131-1375 


! 182-8454 


258-7739 


370-9170 


785-1141 


1708-7195 54 


55 


1360716 


191-1592 


272-7126 


394-1720 


848-9232 


1880-5914 


55 


56 


141-1538 


199-8055 


287-3482 


418-8223 


917-8371 


2069-6506 


56 


57 


146-3884 


208-7978 


302-7157 


444-9517 


9922640 


2277-6156 


57 


58 


151-7800 


218-1497 


318-8514 


472-6488 


1072 6451 


2508-3772 


58 


59 


157-3334 


227-8757 


335-7940 


502-0077 


1159-4568 


2758-0149 


59 


60 


1630534 


237-9907 


353-5837 


533-1282 


12532133 


3034-8164 


60 


61 


168-9450 


248-5103 


372-2629 


566-1159 


1354-4704 


3339-2980 


61 


62 


1750134 


259-4507 


391-8760 


601-0828 


1463-8280 


3674-2278 


62 


63 


181-2638 


270-8288 


412-4699 


638-1478 


1581-9342 


4042-6506 


63 


64 


187-7017 


282-6619 


434-0933 


677-4367 


1709-4889 


4447-9157 


64 


65 


194-3328 


294-9684 


456-7980 


719-0829 


1847-2481 


4893-7073 


65 


66 


201-1627 


307-7671 


480-6379 


763-2278 


19960279 


5384-0780 


66 


67 


208-1976 


321-0778 


505-6698 


8100215 


2156-7102 


5923-4858 


67 


68 


215-4436 


334-9209 


531-9533 


859-6228 


2330-2470 


6516-8344 


68 


69 


222-9089 


349-3177 


559-5510 


912-2002 


2517-6667 


7169-5178 


69 


*70 


230-5941 


364-2905 


588-5285 


967-9322 


2720-0801 


7887-4696 


*70 


71 


238-5119 


379-8621 


618-9549 


1027-0081 


2938-686 


8677-217 


71 


72 


246-6672 


396-0566 


650-9027 


1089-6285 


3174-781 


9545-938 


72 


73 


255-0673 


412-8988 


684-4478 


11560063 


3429-764 


10501-532 


73 


74 


263-7193 


430-4148 


719-6702 


1226-3667 


3705-145 


11552-685 


74 


75 


272-6309 


448-6314 


7566537 


1300-9487 


4002-557 


12708-954 


75 


76 


281-8098 


467-5766 


795-4864 


1380-0056 


4323-761 


13980-849 


76 


77 


291-2641 


487-2797 


836-2607 


1463-8059 


4670-662 


15379-934 


77 


78 


301-0020 


507-7709 


879-0738 


1552-6343 


5045-315 


16918-927 


78 


79 


311-0321 


529-0817 


924-0274 


1646-7924 


5449-940 


18611-820 


79 


80 


3213630 


551-2450 


971-2288 


1746-5999 


5888-935 


20474-002 


80 


81 


3320039 


574-2948 


1020-7903 


1852-3959 


6358-890 


22522-402 


81 


82 


342-9640 


598-2666 


1072-8298 


1964-5396 


6868-601 


24775-643 


82 


83 


354-2529 


623-1972 


1127-4713 


2083-4120 


7419-090 


27254-207 


83 


84 


365-8805 


649-1251 


1184-8448 


2209-4167 


8013-617 


29980-628 


84 


85 


377-8570 


676-0901 


1245-0871 


2342-9817 


8655-706 


32979-690 


85 


86 


390-1927 


704-1337 


1308-3414 


2484-5606 


9349-163 


36278-659 


86 


87 


402-8984 


733-2991 


1374-7585 


2634-6343 


10098-096 


39907-525 


87 


88 


415-9854 


763-6310 


1444-4964 


2793-7123 


10906-943 


43899-277 


88 


89 


429-4650 


795-1763 


1517-7212 


2962-3351 


11780-499 


48290206 


89 


90 


443-3489 


827-9833 


1594-6073 


3141-0752 


12723-939 


53120-226 


90 


91 


457-6494 
472-3789 


862-1027 


1675-3377 


3330-5397 


13748-854 


58433-249 


91 


92 


897-5868 


1760-1045 


3531-3721 


14843 282 


64277-574 


92 


93 


487-5502 


934-4902 


1849-1098 


3744-2544 


16031-745 


70706-331 


93 


94 


5031767 


972-8699 


1942-5653 


3969-9097 


17315-284 


77777-964 


94 


95 


519-2720 


1012-7846 


2040-6935 


4209-1042 


18701-507 


85556-760 


95 


96 


535 8502 


1054-2960 


2143-7282 


4462-6505 


20198-627 


94113-437 


96 


97 


552-9257 


1097-4679 


2251-9146 


4731-4095 


21815-518 


103525780 


97 


98 


570-5135 


1142-3666 


2365-5103 


5016-2941 


23561-759 


113879-358 


98 


99 


588-6289 


1189-0613 


2484-7859 


5318-2718 


25447700 


125268-294 


99 


100 


607-2877 


1237-6237 


2610-0252 


5638-3681 


27484-516 


137796123 


100 



* Example.— £1 per annum, accumulated for 70 years, at 3 per cent., will amount to 
230-5941, or £230 lis. lO^d.— At 4 per cent, to 364-2905, or £364 5s. 10d.— At 5 per cent, to 
588-5285, or £588 10s. '"id.— At 6 per cent to 907-9322, or £967 18s. 8d — At 8 per cent, to 
2720-0801, or £2,720 Is. I^d.— At 10 per cent, to 7887-4696, or £7,887 9s. 4%d. 



404 



TABLES. 



TABLE VII. 

The present Value of One Pound per Annum for any Number of Tears. 



Years. 


3 per 


4 per 


5 per 


6 per 


7 per 


8 per 


9 per 


10 per 






Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 


Cent. 




1 


•4890 


•4855 


•4820 


•4786 


•4752 


•4719 


■4686 


•4654 


1 


1 


•9709 


•9615 


•9524 


•9434 


•9346 


•9259 


•9174 


•9091 


1 


H 


1-4457 


1-4283 


1-4114 


1-3949 


1-3787 


1-3628 


1-3473 


1-3322 


11 


2 


1-9135 


1-8861 


1-8594 


1-8334 


1-8080 


1-7833 


1-7591 


1-7355 


2 


21 


2-3744 


2-3350 


2-2966 


2-2593 


2-2231 


2-1878 


2-1535 


2-1201 


21 


3 


2-8286 


2-7751 


2-7232 


26730 


2-6243 


2-5771 


2-5313 


2-4869 


3 


31 


3-2761 


3-2067 


3-1396 


3-0748 


30122 


2-9517 


2-8931 


2-8365 


31 


4 


3-7171 


3-6299 


3-5460 


3-4651 


3-3872 


3-3121 


3-2397 


3-1699 


4 


41 


4-1516 


4-0449 


3-9425 


3-8442 


3-7497 


3-6590 


3-5717 


3-4877 


41 


5 


4-5797 


4-4518 


4-3295 


4-2124 


4-1002 


3-9927 


3-8897 


3-7908 


5 


51 


5-0015 


4-8509 


4-7071 


4-5700 


4-4390 


43139 


4-1942 


4-0797 


51 


6 


5-4172 


5-2421 


50757 


4-9173 


4-7665 


46229 


4-4859 


4-3553 


6 


61 


5-8267 


5-6258 


5-4354 


5-2547 


5-0832 


49202 


4-7653 


4-6180 


61 


7 


6-2308 


6-0021 


5-7864 


5-5824 


5-3893 


5-2064 


5-0330 


4-8684 


7 


71 


6-6279 


6-3710 


6-1289 


5.9007 


5-6852 


5-4817 


5-2893 


5-1072 


71 


8 


7-0197 


6-7327 


6-4632 


6-2098 


5-9713 


5-7466 


5-5348 


5-3349 


8 


81 


7-4057 


7-0875 


6-7894 


65101 


6-2479 


6-0016 


5-7700 


5-5520 


81 


9 


7-7861 


7-4353 


7-1078 


6-8017 


65152 


62469 


5-9952 


5-7590 


9 


91 


8-1609 


7-7764 


7-4185 


7-0850 


6-7737 


64829 


6-2110 


5-9564 


91 


10 


8-5302 


8-1109 


7-7217 


7-3601 


7-0236 


6-7101 


6-4177 


6-1446 


10 


101 


8-8941. 


8-4389 


8-0176 


7-6273 


7-2651 


6-9286 


6-6156 


63240 


101 


11 


9-2526 


8-7605 


8-3064 


7-8869 


7-4987 


7-1390 


6-8052 


6-4951 


11 


HI 


96059 


9-0759 


8-5882 


8-1390 


7-7244 


7-3413 


6-9868 


6-6582 


HI 


12 


9-9540 


9-3851 


8-8633 


8-3838 


7-9427 


7-5361 


7-1607 


6-8137 


12 


121 


10-2970 


9-6883 


9-1316 


8-6217 


8-1537 


7-7235 


7-3273 


69620 


121 


13 


10-6350 


9-9856 


9-3936 


8-8527 


8-3577 


7-9038 


7-4869 


7-1034 


13 


131 


10-9680 


10-2772 


9-6492 


9-0771 


8-5548 


8-0773 


7-6398 


7-2382 


131 


14 


11-2961 


10-5631 


9-8986 


9-2950 


8-7455 


8-2442 


7-7862 


7-3667 


14 


141 


11-6194 


10-8435 


10-1421 


9-5067 


8-9298 


8-4049 


7-9264 


7-4892 


141 


*15 


11-9379 


11-1184 


10.3797 


9-7122 


9-1079 


8-5595 


8-0607 


7-6061 


*15 


151 


12-2518 


11-3880 


10-6115 


9-9119 


9-2801 


8-7082 


8-1893 


7-7175 


151 


16 


12-5611 


11-6523 


10-8378 


10-1059 


9-4466 


8-8514 


83126 


7-8237 


16 


161 


12-8658 


11-9115 


11-0586 


10-2943 


9 6076 


8-9891 


8-4306 


7-9250 


16* 


17 


131661 


12-1657 


11-2741 


10-4773 


9-7633 


9-1216 


8-5436 


8-0216 


17 


171 


13-4620 


12-4149 


11-4844 


10-6550 


9-9137 


9-2492 


8-6519 


8-1136 


171 


18 


13-7535 


12-6593 


11 6896 


10-8276 


10-0591 


9-3719 


8-7556 


8-2014 


18 


181 


14-0408 


128989 


11-8899 


10-9953 


10-1997 


9-4900 


8-8550 


8-2851 


181 


19 


14-3238 


13-1339 


12-0853 


11-1581 


10-3356 


9-6036 


8-9501 


8-3649 


19 


191 


14-6027 


13-3644 


12-2761 


11-3163 


10-4670 


9-7129 


9-0413 


8-4410 


191 


20 


14-8775 


13-5903 


12-4622 


11-4699 


10 5940 


98181 


9-1285 


8-5136 


20 


201 


15-1482 


13-8119 


12-6439 


11-6191 


10-7168 


9-9194 


9-2122 


8-5827 


201 


21 


15-4150 


140292 


12-8212 


11-7641 


10-8355 


10-0168 


9-2922 


8-6487 


21 


211 


15-6779 


142422 


12-9942 


11-9049 


10-9503 


10-1105 


9-3690 


8-7116 


211 


22 


15-9369 


14-4511 


13-1630 


12-0416 


11-0612 


10-2007 


9-4424 


8-7715 


22 


221 


16-1921 


14-6560 


13-3278 


12-1744 


11-1685 


10-2875 


9-5128 


8-8287 


221 


23 


164436 


14-8568 


13-4886 


12-3034 


11-2722 


103711 


9-5802 


8-8832 


23 


231 


16-6914 


15-0538 


13-6455 


12-4287 


11-3724 


10-4514 


9-6448 


8-9352 


231 


24 


169355 


15-2470 


13-7986 


12-5504 


11-4693 


10-5288 


9-7066 


8-9847 


24 


241 


17-1761 


15-4364 


13-9481 


12-6686 


11-5630 


10-6032 


9-7658 


90320 


241 


25 


17-4131 


15-6221 


14-0939 


12-7834 


11-6536 


10-6748 


9-8226 


9-0770 


25 



* Example. — £1 per annum, for 15 years, at 3 per cent., is worth, in present money, 11 9379, 
or £11 18s. M.— At 4 per cent., 11-1184, or £11 2s. 4V«Z.— At 5 per cent., 10'3797, or £10 7s. Id. 
"•7122, or £9 14s. 3^.— At 7 per cent., 9-1079, or £9 2s. l%d.— At 8 prr cent., 

r.,. JP.Q 1 o Ol/rf At 10 npv p.P.nt, 7C.flfi1 rvp 



At 6 per cent., „ 

8-5595, or £8 lis. 2%d.— At 

£7 12s. l%d. 



per cent., 8-0807, or £8 Is. 2J£<2.- At io per cent., 7fci061, or 



TABLES. 



405 



TABLE VII. {Continued). 
The present value of One Pound per Annum for any number of years. 



Year. 



25* 

26 

261 

27 

271 

28 

29 

291 
*30 
301 
31 
311 
32 
321 
33 
331 
34 

35 

351 

36 

36| 

37 

371 

38 

381 

39 

391 

40 

401 

41 

41* 

42 

421 

43 

431 

44 

45 

45£ 

46 

m 

47 

471 

48 

481 

49 

491 

50 

501 



3 per 
Cent. 



19-6004 
198019 
200004 
20-1960 

20-3888 
20-5787 
20-7658 



17-6467 15-8042 
17-8768 15-9828 



4 per 
Cent. 



18-1036 
183270 

18-5472 
18-7641 
18-9778 
19-1885 



16-1579 
16-3296 
16-4980 
16-6631 
16-8250 
16-9837 



19-3960 17-1394 



17-2920 
17-4417 
17-5885 
17-7324 
17-8736 
180119 
18-1476 



20-9502J18-2807 
21131818-4112 
21-3108|l8-5391 
21-4872118-6646 
21-661018.7876 
21-8323|18-9083 
22-0010)190266 
22-167219-1426 
22-331119-2563 
22-492519-3679 
22-6515|l9.4772 
22-808219-5845 
22-962619-6897 
23-1148jl9-7928 
23-264719-8939 
23-412319-9931 
23-5579 20-0903 
23-7014 ! 20-1853 
23-8427120-2792 
23-9819'20-3708 
24-1191 20-4607 
24-2543)20-5488 
24-387520-6353 
24-5187 20-7200 
24-6480 20-8032 
24-7754' 20-8847 
24-901020-9646 
25 0247,21-0429 
25-1466 21-1198 
25.2667 1 211951 
25-385021-2690 
25-5017J21-3415 
25-6166 21-4125 
25-7298,21-4822 
25-8413i21-5505 



5 per 

Cent. 



6 per 
Cent. 



14-2363 12-8949 
14-375213-0032 
14-510713-1084 
14-643013-2105 
14-7721 13-3098 



7 per 
Cent. 



14-8981 
150211 
15-1411 



13-4062 
13-4998 
13-5907 



15-258213-6790 
15-372513-7648 
15-484013-8482 
15-5928,13-9291 
15-699014-0077 
15-802714-0840 
15-9038141582 
16-002514-2302 
16-0989 14-3002 
16-192914-3681 
16-2847i 14-4341 
16-3742 1 14-4982 
16-4616 14-5605 
16-5469.14-6210 
16-630114-6797 
16.711314-7368 
16-790514-7922 
16-8679 14-8460 
16-9434I14-8983 
17-017014-9491 
17-088914-9984 
17-1591 15-0463 
17-227615-0928) 
17-294415-1380 
17-3596|15-1819 
17-423215-2245 
17-4853 J 15-2660 
17-5459!l5-3062 
17-605115-3452 
17-6628jl5-3832) 
17-7191 J15-4200] 
17-7741 15-4558; 
17-8277)15-4906 
17-880115-5244 
17-931215-5572 
17-981015-5890 
18-029715-6200 
18077215-6500 
18-1235J15-6792 
18-168715-7076 
18-2129 15-7351 
18-2559 15-7619 
18-2980115-7878 



11-7411 
11-8258 
11-9076 
11-9867 
120632 
121371 
12-2086 
12-2777 
12-3445 
12-4090 
12-4715 
12-5318 
12.5902 
126466 
12-7011 
12-7538 
12-8047 
12-8540 
12-9016 
12-9477 
12-9922 
13.0352 
13-0768 
13-1170 
13-1559 
13-1935 
13-2298 
13-2649 
13-2989 
13-3317 
13-3634 
13-3941 
13-4238 
13-4524 
13-4802 
13-5070 
13-5329 
13-5579 
13-5821 
13 6055 
13-6281 
13-6500 
13-6712 
13-6916 
13-7114 
13-7305 
13-7489 
13-7668 
13-7841 
13-8007 
13- 



8 per 
Cent. 



9 per 

Cent. 



10-7437 
10-8100 
10-8738 
109352 
109942 
11-0511 
11-1058 
11-1584 
11-2091 
11-2578 
11-3047 
11-3498 
11-3932 
11-4350 
11-4752 
11-5139 
11-5511 
11.5869 
11-6214 
11-6546 
11-6865 
11-7172 
11-7467 
11-7752 
11-8025 
11-8289 1 
11-8542 
11-8786! 
11-9020 
11-9246 
11-9463 
11-9672 
11-9874 
12 0067 
120253 
12-0432 
120605 
12-0771 
120930 
121084 
121232 
12-1374 
12-1511 
12-1643 
12-1769 
12-1891 
12-2009 
12-2122 
12-2230 
122335 
12-2435 



9-8769 
9-9290 
9-9788 
10-0266 
100723 
10-1161 
10-1581 
10-1983 
10-2368 
10-2737 
10-3090 
10-3428 
10-3752 
10.4062 
'10-4360 
10-4644 
10-4918 
10-5178 
10-5429 
10-5668 
10-5898 
10-6118 
106328 
ilO-6530 
10-6723 
10-6908 
10-7085 
10-7255 
10-7418 
10-7574 
10-7723 
10-7866 
10-8003 
10-8134 
10-8259 
10-8380 
108495 
10-8605 
10-8711 
10-8812 
10-8909 
10-9002 
10-9091 
109176 
10-9258 
10-9336 
10-9411 
10-9482 
10-9551 
10-9617 
10-9680 



10 per 
Cent. 



9-1200 
9-1609 
9-2000 
9-2372 
9-2777 
9.3086 
9-3388 
9-3696 
9-3989 
9-4269 
9-4536 
9-4790 
9-5033 
9-5264 
9-5484 
9-5694 
9-5895 
9-6086 
9-6268 
9-6442 
9-6607 
9-6765 
9-6916 
9-7059 
9.7196 
9.7327 
9-7451 
9-7570 
9-7683 
9-7791 
9-7893 
9-7991 
9-8085 
9-8174 
9-8259 
9-8340 
98417 
9-8491 
9.8561 
9-8628 
9-8692 
9-8753 
9-8811 



•8919 



9-9017 
9-9063 
9-9107 
9-9148 
9-9188 



Years. 



251 
26 

261 

27 

271 

28 

281 

29 

291 



31 

311 

32 

321 

33 

331 

34 

341 

35 

351 

36 

361 

37 ' 

371 

38 

381 

39 

391 

40 

401 

41 

411 

42 

421 

43 

431 

44 

441 

45 

451 

46 

461 

47 

471 

48 

481 

49 

491 

50 

501 



* Example.— £1 per annum, for 30 years, at 3 per cent., is worth in present money 19 - 6004, 
or £19 12s.— At 4 per cent., 172920, or £17 5s. 10d— At 5 per cent., 153725, or £15 7s. <6d — 
At 6 per cent., 137648, or £13 15s. 4d.— At 7 per cent., 124090, or £12 8s. 2d.— At 8 per cent., 
11-2578, or £11 5s. 2d— At 9 per cent., 10-2737, or £10 5s. Qd.— At 10 per cent., 9-4269, or 
£9 8s. 6c*. 



406 



TAELES. 



TABLE VII. {Continued). 
The present value of One Pound per Annum for any number of years. 



Years. 



51 
52 
53 
54 
55 
56 
57 
58 
59 
*60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 



90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 



25-9512 
261662 
26-3754 

26-5777 



26-7744122-1086 
26-9655 22-2198 

27-1509|22-3267 
27-3310 22-4298 



27-5058 
27-6756 
27-8404 
28-0003 
28-1557 
28-3065 
28-4529 
28-5950 
28-7330 
28-8670 
28-9971 
29-1234 
29-2460 
29-3651 



3 per 

Cent. 



4 per 
Cent. 



21-6175 

21-7476 
21-8727 
21-9930 



5 per 
Cent. 



6 per 

Cent. 



7 per 
Cent. 



22-5284 
22 6235 
22-7149 
22-8029 
22-8873 
22-9685 
23-0467 
23-1218 
23-1940 
23-2635 
23'3303 
23-3945 
23-4563 
23-5156 



29-4807 23-5727 
29-5929 23-6276 
29-7018 23-6804 
29.8076 237312 
29-9103 23-7800 
30-0100I23-8269 
30-1068 23-8720 
30-2008 23-9154 
30-2920 23.9571 
303806 23-9972 



30-4666 
30-5501 
30-6312 
30-7099 
30-7863 
30-8605 
309325 
31-0024 



24-0358 
240729 
241085 
24-1428 
241758 
24-2075 
242380 
242673 



31 -0703 1242955 
31-1362|243226 
31-2002 24-3486 
31-2623 243737 
31-3227 243978 
31-3812 244209 
31-4381 (24-4432 
31-4933 24-4646 



31-5469 
31-5989 

33' 



244852 
245050 

25-0000 



18-3390 
18-4181 
18-4934 
185651 
18-6335 
18-6985 
18-7605 
18-8195 
18-8758 
18-9293 
18-9803: 
19-0288 
19-0751 
19-1191 
191611 
19-2010 
19-2391 
19-2753 
19-3098 
19-3427 
19-3740 
19-4038 
194322 
19-4592 
19-4850 
19.5095 
19-5329 
19-5551 
19-5763 
19-5965 
19-6157 
19-6340 
196514 
19-6680 
19-6838 
19-6989 
19-7132 
19-7269 
19.7399 
19-7523 
19-7641 
19-7753 
19-7860 
19-7962 
19-8059 
19-8151 
19-8239 
198323 
19-8403 
19-8479 

20 0000 



15-8131 
15-8614 
15-9070 
159500 
15-9905 
16-0288 
16-0649 
160990 
161311 
161614 
16-1900 
16-2170 
16-2425 
16-2665 
16-2891 
16-3105 
16-3307 
16-3497 
16-3676 
16.3845 
16-4005 
16-4156 
16-4298 
16-4432 
16-4558 
16-4678 
16-4790 
16-4897 
16-4997 
16-5091 
16-5180 
16-5265 
165344 
16-5419 
16-5489 
16-5556 
16-5619 
16-5678 
16-5734 
16-5787 
16-5837 
16-5884 
16-5928 
16-5970 
16-6009 
16-6047 
166082 
16-6115 
16-6146 
16-6175 



8 per 
Cent. 



13-8325 

13-8621 

13-8898 

13-9157 

13-9399J12 

13-9626ll2 

13-9837,12 

140035112 

14-0219112 

140392;12 

14055312 

14-0704 12 

14-0845 12 

140976 12 

141099 12 

14121412 



141322 
141422 
141516 
14-1604 
14-1686 
14-1763 
14-1834 
141901 
141964 
14-2022 
142077 
142128 
142175 
142220 
14-2262 
14-2301 
142337 
142371 
142403 
142433 
142460 
142486 
142511 
142533 
142554 
142574 
142592 
142610 
142626 
142641 
142655 
142669 
14.2681 
142693 



16-6867 14-2857 



2532 
2715 

2884 
3041 
3186 
3320 
3445 
3560 
3667 
3766 
3857 
3942 
4020 
4093 
4160 
4222 
4280 
4333 
4382 
4428 
4471 
4510 
4546 
4580 
4610 
4640 
4666 
4690 
4714 
4735 
4755 
4773 
4790 
4805 
4820 
4833 
4845 
4857 
4868 
4877 



9 per 10 per 

Cent. Cent. 



4895 
4903 
4910 
4917 
4923 
4928 
4934 
4939 
4943 



12-5000 



10-9740 9-9226 

10-9853 9-9296 

109957 9-9360 

11-0053 9-9418 

11-0140 9-9471 

11-0220 9.9519 

11-0294 9-9563 

11-0361 9-9603 

11-0423 9-9639 

11-0480 9-9672 

11-0532 9-9701 

11-0580 9-9729 

11-0624 9-9753 

11-0664 9-9776 

11-0701 9-9796 

110735 9-9815 

11-0766 9-9831 

11-0794 9-9847 

11-0820 9-9861 

11-0844 9-9873 

11-0867 9-9885 

11-0887 9-9895 

11-0905 9-9905 

11-0922 9-9914 

11-0938 9-9921 

11-0952 9-9929 

11-0965 9-9935 

11-0977 9-9941 

11-0988 9-9946 

11-0998 9-9951 

11-1008 9-9956 

11-1016 9-9960 

11-1024 9-9963 

11-1031 9-9967 

11-1038 9-9970 

11-1044 9-9972 

11-1049 9-9975 

11-1055 9-9977 

11-1059 9-9979 
11-1064 

11-1067 9-9983 

11-1071 9-9984 

11-1074 9-9986 

11-1077 9-9987 

111080 9 

11-1083 99989 

11-1085 9-9990 

11-1087 9-9991 

11-1089 9-9992 

11-1091 9-9993 



Years. 



. , ,„. -£1 per annum, for 60 years, at 3 per cent., is worth in present money 276756, 
or £27 13.9. Qd.— At 4 per cent., 22-6235, or £22 12s. 6d.— At 5 per cent., 18-9293, or £18 18s. Id. 



* Example. 



—At 6 per cent., 16-1614, or £16 3s. 3d.— At 7 per cent., 14-0392, or £14 0$. M.— At 8 per 
cent., 12-3766, or £12 7s. (id.— At 9 per cent., 11-0480, or £11 0s. lid.— At 10 per cent., 9-9672, 
or £9 195. 4d. 



CHAPTER III. 

INSURANCE SHAKES AS AN INVESTMENT. 

A short chapter on Insurance Shares may not be unacceptable 
to our readers ; for while it will be too late to save some of them 
from the bitter experience of the past few years, it may be in 
time to offer a word of warning to many who might otherwise fall 
victims. Such a chapter is also essential to the completion of the 
design of this work. 

There are thousands of persons who up till quite recently 
never knew any other than the bright side of the Insurance 
share question : some perchance even yet have their knowledge 
limited to the weekly columns of the Bankers' Circular, the 
Economist, or some other " weekly newspaper : " and as it is 
rarely that any but the well-conducted and successful Com- 
panies find their way into the columns of respectable journals, 
the public information is necessarily limited. Turn to any 
of these ordinary lists and what can be more fascinating ? You 
will find that the shares of the Mock, with 10s. paid, command 
£7 155. in the market. You will find the Provident with £10 
paid, selling for £38, or the Universal^ with the same amount 
paid, selling for £33 10s. ; or again the Laio Life, with £10 paid, 
selling for £S9. It is almost wonderful that with such figures 
everybody's money does not go into Insurance shares. But there 
is another side to the picture. It is to be found in the table of 
offices that have ceased to exist, given in our earlier portion of 
this work. That table applies to Life Offices only. We have one 
in preparation for the Fire Offices, and a fearful list it is. Shall 
we glance at the fate of a few of the Offices that lay claim to its 
space ? What tales of misery it brings up to our recollection. It 
seems but as yesterday that a gentleman was in the Queen's 
Bench Prison for liabilities to the extent of £40,000 for having 
taken ten shares in a bubble Insurance Company ; or that another 
gentleman went through the Insolvent Debtors' Court chiefly in 
consequence of a claim of £2,300 for his share of the liabilities of 
the defunct Comities Union! A whole list of such misfortunes 
are crowding down to our pen's point. The Preston and North 
Lancashire Office, in a little less than three years, lost all its paid- 
up capital of £20,000, and the shareholders had to make up the 
remaining liabilities ; the Brewers'* Company lost all its capital, 
and the shareholders accounted themselves fortunate in escaping 
with a call of £2 per share in addition ; the Sceptre closed its 
doors with a loss of £3,000 ; the Irish Alliance of £20,000 ; the 
Bath, £18,000; the Beacon upwards of £40,000, of which Sir 
Peter Laurie (one of the exposers of the rascally West Middlesex) 



108 THE BRIGHT SIDE AND THE DARK SIDE. 

had to pay £7,000.* Then there is the Sea, Fire, Life, — to 
escape from the liabilities of which many have submitted to years 
of exile. Coming down to more recent dates we have before us 
the misfortunes of the State (Fire) Office, the Legal and Com- 
mercial, and the Protestant • and, returning to the Life Offices, the 
Asylum, the Amazon, the Deposit and General, the National 
Guardian, the Athenwum, and the Prince of Wales, are amongst 
the most recent instances of Offices which have spread ruin and 
dismay amongst their shareholders. 

Here, then, we have seen the two extremes of insurance specu- 
lation : we may now discuss the subject calmly. In all kinds of 
hazard we must prepare for extremes — extreme success — extreme 
adversity and consequent disappointment, or even ruin. In the 
early days of Proprietary Insurance Offices the hazard was less 
than now ; for, if success was slow, it was generally sure. In 
modern times Companies endeavor to rush into a large business 
suddenly ; and hence the chief point of danger. The object of 
raising a capital by shares was originally for the protection of a 
Company ; but it has become the modern fashion to expend this 
sum or the greater part of it in what is termed (but does not 
always turn out to be the fact) " establishing a business." If the 
business so obtained proves to be sound and good it is well for 
the shareholders. The speculation has succeeded and the expen- 
diture is not regretted. But the chances are that a connection 
obtained by lavish expenditure will be of a very promiscuous and 
unstable character — will be a business, in fact, requiring the con- 
stant aid of capital to carry it on ; but, the capital having been 
expended in obtaining it, the concern has to struggle on as best it 
may. Being no longer able to purchase business it has to seek it 
by ordinary and legitimate means. Agents perceive the change 
and become dissatisfied. The business falls off or, if sustained in 
amount, suffers in character; bad lives being accepted because 
good ones are not offered ; and, finally, the whole thing becomes 
a wreck, and the shareholders, only at this last act of the drama, 
learn the full extent of their liabilities and misfortunes. 

We need not say how many of the modern Offices sit before 
our mind's eye for this mournful portraiture ; nor need we say 
that such consequences may, by prudent management, be averted 
or avoided. 

There is room for all the present Assurance Offices : there is 
room for any reasonable number of new ones, provided they can 
show good grounds for springing into existence. But there is no 
real chance for Offices that are not prudently and economically 
managed. Where such conditions exist we know of no specula- 
tion presenting greater probabilities of success than Assurance 
and Insurance Companies : consequently we know of no class of 
shares more calculated to produce advantageous investments. 
Insurance Associations are in their very nature of slow growth ; 

* Vide " Post Magazine and Insurance Monitor." 



LIMITED AND UNLIMITED LIABILITY. 409 

and their shares will not be expected by prudent holders to rise 
suddenly into value. If the principle of distributing the surplus 
or profits be an equitable one, the value of the shares will grow 
with the growth of the Office : the investment will, therefore, be 
of a permanent character ; and the ephemeral results, looked for 
from many Joint Stock Companies, are not to be looked for here. 

In the list of shares given at the close of this chapter we have 
adopted three distinct classifications in addition to a miscel- 
laneous table. The first table relates to shares in Companies 
doing life business only. The second to Companies combining 
the business of Life and Fire Insurance under the same deeds or 
charters ; and the third table comprises Offices doing Fire busi- 
ness only. 

A few words may be said by way of explanation of this classi- 
fication. Offices doing life business only, if properly conducted, 
are subject, after the first few years, to very slight fluctuations in 
their mortality ; and provided, therefore, they be economically, 
as well as skilfully managed, their shares may be looked upon as 
certain ultimately to become valuable : their value being depen- 
dent upon (1) the character of the business transacted — (2) its 
amount, and (3) the proportion of profits apportioned to the 
shareholders under the deed. 

We have already (p. 26V) offered some remarks upon the im- 
propriety of Life and Fire business being so combined as that the 
losses shall be paid out of one common fund. The nature of Fire 
business is such as to render it far more fluctuating in profit or 
loss than Life business. If the fluctuation be on the side of loss, 
then the life funds — or the funds necessary to meet the claims 
under the life policies — will be encroached upon, and both policy- 
holders and shareholders will, in all probability, suffer. The cus- 
tom is, fortunately, almost discontinued in the present day ; and 
the existing Offices which were originally so constituted have 
mostly attained to a position of safety. Still we cannot look upon 
shares in such Companies as nearly so desirable as those in estab- 
lished Life Offices, and hence we place them in the second class. 
The elements of risk still exist, however large and apparently 
successful the business may have become. 

The third list is confined to the shares of Fire Offices only : that 
is, Offices who either do no life business — as the Phoenix or the 
County — or to Companies worked with Life Offices, but having 
distinct funds and deeds, as the Sun or the Imperial. That a 
Fire business may be managed so as to pay, and to pay well, 
there can be no doubt ; but, to this end, great care and caution 
must be exercised in these days of vigorous and almost unscrupu- 
lous competition. To young Fire Offices we may give three words 
of advice: — 1. Avoid large risks. 2. Avoid adjoining risks. 3. 
Avoid hazardous risks. What are technically called first-class 
risks pay better than all others whatever rate of premium may 
be secured. The Essex Economic Fire Office, for many years, 



410 ADVANTAGES AND DISADVANTAGES DISCUSSED. 

insured first-class dwelling-houses and their contents at Is. per 
cent. ; and, while it confined its attention to this description of 
business, it paid well, although its business was comparatively 
small. When its managers became more ambitious, and launched 
out into more hazardous risks, the decline of the Office soon 
became apparent, and an amalgamation was the result. 

It must be borne in mind that, while most of the Insurance 
Companies founded since 1862 come under the operation of the 
Limited Liability Law, the Companies founded before that period 
do not as a rule possess that advantage. In our remarks upon 
Mixed Offices (Div. III. chap. 6) we have shown how, by the in- 
troduction of special clauses in the policies, the liability of share- 
holders has been attempted to be limited. In Companies which 
have obtained a special Act of Incorporation, or a Royal Charter, 
the liability is generally limited. The ordeal through which 
Companies pass to obtain such privileges is generally very severe. 
This non-limitation of liability is an important point to be re- 
membered by investors in the shares of Insurance Companies; 
but it is such an obvious one that we do not intend to enlarge 
upon it. 

Finally, as we have elsewhere remarked, a change has come 
over the practice of Assurance Companies calculated to lessen the 
probabilities of those large profits resulting to shareholders which 
we see in the case of some of the earlier Companies. Persons 
intending to assure their lives now look to Offices which divide, 
at least, the greater portion of their profits amongst the policy- 
holders : and the period at which a division of profits commences 
dates earlier in the history of the Company than in days gone by. 
Instead of waiting twenty years, as did the Equitable, we expect 
now to see it stated on the prospectus of a new Office that the 
first division of profits will be at the expiration of five or seven 
years from the commencement ; and it is rarely that the managers 
of a Company, whatever its position, will muster the courage — or 
shall we say the honesty — fairly to state that, in consequence of 
the heavy preliminary expenses incident to the establishment of 
an Office in the present day, there is no surplus to divide. 

On the contrary, with a view to establish confidence, the largest 
possible bonus is given to the policy-holders; and, under such 
circumstances, the shareholders naturally expect to participate in 
the good fortune of the Office ; hence double claims are made on 
its funds ; the foundations of misfortune are laid ; and, finally, the 
adage becomes realized that "a thing too good is always dan- 
gerous." 

Taking the cautions here presented for what they are worth, 
and adding, as any business man may do, the still more obvious 
one of seeing, before applying for shares, that the character of the 
persons with whom we shall place ourselves in contact by the 
contemplated step are respectable, trustworthy, and competent to 
conduct the business they have undertaken, the reader may deter- 
mine upon the desirability of entering upon this class of Assurance 



TABLES. 



411 



investment. "We trust that the day has gone by for looking npon 
Insurance shares, promiscuously taken, as amongst the most haz- 
ardous and ruinous of adventures ; and, taking courage in the fact 
that the fiercest storms are succeeded by the mildest calms, we 
bring this chapter to a conclusion: — "Nothing venture, nothing 
have," being the motto which the goddess of fortune has inscribed 
over the portals of her temple. 

TABLE I. 

Offices doing Life Business only. 



NAME. 



and 



and 



Albert 

Argus 

Albion 

Briton, Medical 
General 

City of Glasgow . 

Clerical, Medical 
General 

Crown 

Eagle 

Edinburgh 

English & Scottish Law 

Equity and Law, 

Equitable Reversionary 

General Provident 

Gresham 

International 

Imperial Life 

Law Life 

Law Property 

Legal and General 

Life Association of Scot- 
land 

London & Provincial Law 

London and Lancashire 

National Industrial . . . 

National Union 

Pelican 

Provincial Union 

Provident 

Hock 

Sun 

Scottish Friendly 

Sovereign 

Standard 

Star 

Universal 

Westminster & General 

Whittington , 



Nominal 
Capital. 



£ 
500,000 
300,000 
1,000,000 

200,000 
600,000 

500,000 
308,000 

2,000,000 
500,000 

1,000,000 

1,000,000 
283,500 
500,000 
100,000 
500,000 
750,000 

1,000,000 
250,000 

1,000,000 

400,000 
1,000,000 
100,000 
100,000 
100,000 
Stock, 
100,000 
250,000 
1,000,000 

100,000 
180,000 
500,000 
100,000 
500,000 
100,000 
100,000 



Number 

of 
Shares. 



25,000 
3,000 
2,000 

20,000 
24,000 

5,000 

6,160 
40,000 

5,000 
20,000 
10,000 

2,700 
50,000 

5,000 
25,000 

7,500 
10,000 

5,000 
20,000 

10,000 

20,000 
10,000 
10,000 
20,000 
40,000 

2,500 

200,000 

4,000 

10,000 

18,000 

10,000 

4,000 

5,000 

10,000 



Amount. 



£ 

20 
100 
500 

10 
25 

100 

50 

50 

100 

50 

100 

105 

10 

20 

20 

100 

100 

50 

50 

40 
50 
10 
10 
5 



100 
5 

10 
10 
50 
25 
100 



u d. 





























































10 



Paid up. 


£ s. 

3 

25 

50 


d, 





1 

2 10 







10 
5 

5 
15 

3 5 

6 










2 





2 10 
10 
10 








8 





6 
4 17 
1 




8 



1 





10 
10 






1 

2 17 






1 15 
10 






1 






Present 
Price. 




£ s. 


d. 


31 10 





1 10 

4 10 






28 
27 5 

7 5 

29 17 
4 
7 15 

102 15 
1 





6 






15 
89 






7 10 





20 10 

4 10 








5 

54 

15 
38 

7 15 



2 10 
33 10 



412 



TABLES. 



TABLE II. 

Offices transacting Life and Mre Business. 



NAME. 



Alliance 

Atlas 

Caledonian 

Church of England . . 
Commercial Union. . . 

European 

General 

Guardian 

Hand-in-Hand 

Hercules 

Lancashire 

Law Union 

Liverp'l & Lond. & Globe 
London Assurance . . 
London and Southwark 
National Ass. of Ireland 
North British & Mercan. 

Northern 

Patriotic 

Provincial (Welsh) .... 

Queen 

Royal 

Royal Exchange Assur. 

Royal Farmers' 

Scottish Imperial 

Scottish National. , 

Scottish Provincial 

Scottish Union 

Union 

West of England 

Yorkshire 



Nominal 
Capital. 



£ 
5,000,000 
1,200,000 
1,500,000 
1,000,000 
2,500,000 
280,000 
1,000,000 
2,000,000 

230,000 

1,460,400 

1,000,000 

1,750,080 

896,550 

175,250 

1,000,000 

2,000,000 

2,000,000 

1,421,500 

200,000 

2,000,000 

2,000,000 

689,220 

500,000 

1,000,000 

200,000 

1,000,000 

5,000,000 

300,000 

600,000 



Number 

of 
Shares. 



50,000 
24,000 
15,000 
20,000 
50,000 
120,000 
10,000 
20,000 

23,000 

73,020 

100,000 

87,504 

35,862 

7,010 

4,000 

40,000 

20,000 

14,215 

20,000 

200,000 

100,000 

Stock. 

50,000 

50,000 

20,000 

20,000 

1,500 



Amount. 



£ 

100 
50 

100 

50 

50 

2 

100 

100 

10 

20 

10 

20 

25 

25 

250 

50 

100 

100 

10 

10 

20 

10 
20 
10 
50 
20 
200 



r. d. 









6 8 













































Paid up. 



£ s. d. 
11 

5 15 
10 

2 

5 



5 
50 



2 
2 


2 

5 

25 
6 
5 

10 
1 
1 
3 
100 
2 
1 
2 
2 
1 

20 



15 





15 

10 










10 





Present 
Price. 



£ s. 
13 5 
10 
38 

3 15 

4 5 



5 

46 10 



3 5 

6 15 
46 10 



3 

6 
305 



2 11 

280 



TABLE III. 





Fire 


Offices only. 






NAME. 


Nominal 
Capital. 


Number 

of 
Shares. 


Amount. 


Paid up. 


Present 
Price. 




£ 

300,000 

500,000 

400,000 

50,000 

1,200,000 

5,000,000 

1,000,000 

1,000,000 


1,200 

20,000 
4,000 


£ 5. d. 
250 

25 
100 


£ 8. d. 
55 

10 
10 

10 
50 

2 10 

2 10 
10 


£ 8. d. 
108 

12 6 
86 

10 
345 

5 

9 


Birmingham Alliance . . 


Household 


25,000 2 

2,400500 

50,000100 


Imperial Fire 


Law Fire 


London and Lancashire 
Manchester 


40,000 
10,000 


25 
100 



TABLES. 



413 



TABLE III. (continued). 



NAME. 



Norwich Equitable 

Phoenix 

Salop 

Scottish Commercial. . . 

Scottish Fire 

Shropshire and N. Wales 

Sun, Fire 

Westminster. 



Nominal 
Capital. 



£ 

250,000 

50,000 

60,480 

550,000 

1,000,000 

100,000 

300,000 

100,000 



Number 
of 

Shares. 



50,000 

Stock. 

Stock. 

55,000 

50,000 



Amount. 



£ 
5 

100 

All. 

10 

20 



. d, 




1,500 200 



Paid up. 



10 
2 

200 



Present 


Price. 




£ 


s. 


a. 


107 








1 


15 





1 


10 






TABLE IV. 

Miscellaneous Companies. 



Accident 

Alliance 

Birmingham Alliance. . 
Boiler 

Brit. & Foreign Marine 

County Cattle 

County 

County Marine 

Dublin Widows 1 Fund . 
English & Scottish Mar. 

Equitable 

Etna 

General Hail-Storm. . . . 
General Reversionary.. 

Home and Colonial 

Indemnity Marine 

Law Reversionary Int . 
London & Caledonian. . 
London & Prov. Marine 

Marine. 

Maritime 

National Guarantee 

National Reversionary. 

Ocean Marine 

Oriental and General.. 
Protector 

Railway Passengers. . . 
Re-Insurance 

Thames and Mersey. . . 

Union 

Universal Marine 

Western 



Nature of Business. 



Accidents 

Marine 

Life,Guar. & Ann. 
Steam Boilers, 

Machinery, &c. 

Marine 

Accidents toCattle 

Hail 

Marine and Mari- 

ners's Lives — 
Re version'ryAnn . 

Marine 

Hail 

Fire and Marine. . 

Hail- Storm 

PurchaseofRever. 

Marine 

Marine 

Reversions&Ann. 

Marine 

Marine 

Ships and Goods . 

Marine 

Fidelity 

Reversions 

Marine 

Marine 

Endow. Annuities 

and Loans 

Accidents 

Life, Accidents, 

Marine,Fire,&c. 

Marine 

Marine 

Marine 

Fire and Marine. . 



Nominal 
Capital. 



£ 
50,000 
1,000,000 
250,000 

175,000 

1,000,000 

50,000 



No. of 

Shares. 



25,000 
10,000 
10,000 

35,000 

50,000 

5,000 



100,000 ! 25,000 

I 

1,000,000 I 10,000 



5,000,000 ; 
200,000 I 
500,000 

1,000,000 i 

1.345,300 
250,000 | 
500,000 I 

1,000,000 i 

1,000,000 ! 

500,000 : 
250,000 



500,000 
8,000 
5,000 
20,000 
13,453 
10,000 
20,000 
50,000 
10,000 
50.000 
12,500 



1,000,000 J 40,000 



100,000 
1,000,000 

100,000 
2,000,000 

300,000 
1,000,000 
1,000,000 



1,000 
20,000 

50,000 

100,000 

1,500 

50,000 



Amount of 
Shares. 



s. d. 



100 

25 

5 

20 

10 



4 

100 



10 

25 

100 

50 

100 

25 

25 



£ s. d. 

10 

25 

10 

10 

2 

10 









10 



25 



100 

50 

2 

20 

200 

20 



18 
2 
1 



5 




15 
2 



2 10 
10 



10 



1 10 
113 



Mdis. 
96 10 



19 10 



10 10 

2 5 10 

20 0277 2 6 

5 3 5 



[The time required for the completion of other portions of this work, coupled with the foolish 
reserve employed by some of the offices respecting the true position of their share capital, 
has caused these Tables to assume a somewhat incomplete state. The shares of many of 
the Companies hardly ever come into the market ; and hence the meagreness of informa- 
tion, which has chiefly been derived from published share-lists. The prices may be written 
in as they come to the knowledge of the reader.] 



DIVISION VI 



MISCELLANEOUS. 



CHAPTER I. 

GUIDE TO THE SELECTION OP AN ASSURANCE OFFICE. 

" The shrewd, practical sense, with which Englishmen are accustomed to in- 
vestigate most matters of pecuniary interest, would, if applied earnestly to 
inquiries as to Life Assurance Companies, soon lead many to discover that 
other small and unimportant points of difference are suffered to divert 
attention from real and substantial grounds of preference or of objection. 
Plans of apparent advantage to assurers which have been, substantially, 
long adopted, are dressed up in new garbs, and brought out with new names 
as distinctive features of new Companies. And what little there is of real 
novelty will often be found, if closely investigated, as to its results in prac- 
tice, to be of almost infinitesimal value, compared with those great and solid 
advantages of which the proportion afforded by different Companies is the 
real matter for inquiry. But it is easier to contrive such attractive allure- 
ments than to manage a Company with economy and skill, so as to attract 
business by showing actual results. Fallacious prospects will therefore 
continue to be held out ; and the only effectual protection for the public will 
be found in their own good sense and intelligence." — Mr. Frederick Chaplin's 
Pamphlet on Life Offices. 

All that has been said in the previous chapters of this work is 
intended to prepare for, and aid in, the solution of the one great 
problem — the selection of an Office. Agents require this informa- 
tion. Persons who intend to assure, if possible, still more so f 
As the latter, however, generally draw their information from the 
former, we shall address ourselves more particularly to Agents : it 
is they who extend the blessings of life assurance ; it is they who 
should, as far as possible, make themselves masters of its details. 

The subject appears to admit of, and indeed to require, a double 
process of treatment. We must not only indicate what is to be 
sought for, but also what is to be avoided. The mariner with 
eager eye seeks the beacon light, and with steady hand steers away 
from the danger it indicates. What the beacon is to the mariner, 
we hope to be to the Assurance Agent : giving him sufficient light 
to guide his course: sufficient warning to keep him clear of 
danger. 



PRELIMINARY CAUTION. 415 

We have at this point more than at any other, to avoid any 
expression of partiality. It is no part of our purpose to advocate 
one class of Offices over another. But it is an essential part of 
our purpose to indicate sound from unsound principles, to discri- 
minate between those principles which are calculated to lead to 
success ; and those which are fallacious, and likely to produce 
disappointment and disaster. This can be done with strict im- 
partiality. All previous writers, who have had the science of the 
subject truly at heart, rather than the advancement of any parti- 
cular principle or Office, have deemed it necessary to utter words 
of warning regarding the danger which appeared to be gradually 
surrounding the practice of Life Assurance. These appear to be 
chiefly of two classes : 1. That the public was being led to 
expect too much ; and 2. That the benefits which the system is 
really capable of affording were becoming wilfully distorted and 
perverted. 

Dr. Price, who, as the reader knows, was one of the earliest 
practical writers on the subject, pointed out with much earnest- 
ness the great importance, in order to the " safety" of Life Offices, 
that their affairs should be under the inspection of able mathema- 
ticians. " Melancholy experience," he says, " shows that none but 
mathematicians are qualified for forming and conducting schemes 
of this kind. In short, dangerous mistakes may sometimes be 
committed if the affairs of such Societies are not managed fru- 
gally, carefully, and prudently" Mr. Francis Baily, who, like Dr. 
Price, rendered good service in exposing the fallacies of many of 
the early Assurance and Annuity schemes, passed in review in the 
first portion of this work, illustrates the caution required in carry- 
ing out a Life Assurance as contrasted with Fire Insurance. "A 
person," he says, " who makes an insurance against Fire, is con- 
tent if the Office at which he insures possesses the present confi- 
dence of the public and of himself, since he may remove the 
policy to any other Office whenever he doubts its stability or 
responsibleness. Not so (he justly adds) with a Life Assurance. 
For a policy of that kind once entered into cannot be removed 
without considerable loss and inconvenience to the party." Then 
he comes to the gist of the matter: "As the claim may not 
become due for 20, 30, or 40 years, (nay, perhaps, for more than 
half a century) it therefore particularly behoves him to be satis- 
fied not only with the present flourishing state of the Society, but 
with the prospect of its permanency, and future solvency" Mr. 
Babbage has written in the same strain. Professor de Morgan 
shows still further grounds for caution. " A Life Office," he says, 
" may be in reality insolvent many years before the symptoms of 
bankruptcy come on !" He admits that an Office which has been 
in a state of insolvency may, by introducing a better system, "or 
by the mere force of circumstances," recover its position. " But," 
he continues, "I throw this part of the argument (though it 
shows a strong principle of vitality inherent to the constitution of 



416 DANGEES TO BE GUAEDED AGAINST. 

such Offices) out of the question ; for surely no sane and honest 
person would trifle ivith important matters so far as to assert that 
the possibility of temporary insolvency to be redeemed by the chap- 
ter of accidents, or prudence when it was wanted, should enter into 
the deliberate calculations on which men should be invited to stake 
the existence of their children" 

A host of writers follow with the same views. We do not 
require to quote them. The truth from one source is as great as 
the truth from a hundred. Still where so many considerations 
exist, it is well to see that none which are of importance are 
passed over ; and, above all, we are desirous of showing that the 
principles we lay down have the support of older and wiser heads 
than our own. Various writers lend various aspects to the 
caution to be employed. Passing from the great mathematicians 
above quoted, we come amongst a batch who may be termed, by 
way of distinction, the moral writers on the assurance question. 
They guard us against the deceptions and dangers of untoward 
appearances with an enthusiasm worthy of their cause. Mr. 
Pocock points out the importance of being satisfied a that the 
parties having the management of the Office are well known to 
the mercantile world as men of substance, integrity, and intelli- 
gence, rather than persons with imposing titles, such as, in fact, 
are daily announced as Managers and Directors of many of the 
speculations of the present time : for it should always be borne in 
mind that the great object to be obtained is prudent management, 
and a carefid investment of the funds of the Society." Another 
of the same school reminds us, as indeed we have already seen, 
and shall do well here again to note, that many of the most flou- 
rishing Offices now in existence began humbly, and have worked 
their way up into solid and substantial Institutions, "not by 
catch-penny instrumentalities, but on deliberate calculation, and 
on well-directed and continued efforts." And a third, addressing 
himself to the readers of the Post 3fagazine, the pages of which 
are ever open to such advice and caution, says, " It is admitted, 
by all prudent persons, that previously to depositing money with 
a banker, we should have undoubted evidence of the solvency and 
ability to pay all demands when required." And he asks, " If 
such is a necessary precaution with a banker, how much more so 
with a Life Assurance Company, with which a contract has been 
made to pay an annual sum to provide for a certain contingency, 
whenever such an event may happen, which sum cannot be with- 
drawn but at a great sacrifice ?" 

The last writer leads us almost to a financial aspect of the case. 
This we shall deal with presently. We have yet one or two of 
the moral writers to dispose of. " To our mind," says another 
of these, " incomparably the most important point is, that a 
parent (when about to perform what we consider to be the holy 
duty of providing for his family), should be enabled to judge for 
himself whether the Society into which he is about to enter, is 



ADVICE FROM BROTHER JONATHAN. 417 

one which is likely to deceive him at a time when deception is 
most deplorable, and its effects perhaps irredeemable," — such 
information it is the purpose of the present chapter to furnish. 

The following remarks we commend to our readers, as bearing 
strongly on the subject before us : — 

" Life policies are often the sole provision for the widow and the orphan, the 
result, perhaps, of the savings of a life-time ; it would be well, therefore, if 
every man who makes such a provision would consider how miserable a termina- 
tion it would be to his exertions for him to discover in his old age that he had 
not been paying the premium, as he had supposed, upon a policy of insurance, 
but purchasing a share in a loan society ; and that in the event of his death 
that provision might turn out to be imaginary, and those most dear to him, in 
the place of competence, be reduced to poverty and want. In what way, then, 
can a man secure himself ? We think only by carefully investigating the cha- 
racter of the office itself, and taking care that it be one of wealth, standing, and 
repute."* 

Do not these remarks apply as well to eighteen 'sixty-seven as 
to eighteen 'forty-six, the year to which they were particularly 
directed ? The numerous Insurance Companies now winding up 
in the Court of Chancery afford an answer ! Here is some advice 
wafted from the other side of the Atlantic: brother Jonathan has 
the credit of beinsr far-seeing; in these matters : — 

" If the Office be established, no difficulty need be experienced in ascer- 
taining how it has acted towards its members. Has it invariably kept them 
in the dark in reference to its affairs ? Does it hold its meetings with closed 
doors, that it may effectually conceal the condition of its business ? Has it 
dealt honorably with embarrassed members, and been governed in its settle- 
ment of claims by the spirit rather than by the letter of the assurance con- 
tract ? If the answers to the interrogatories be not satisfactory, have nothing 
to do with it ; avoid it as you would an Indiana bank-note. If satisfactory, 
then look a little further. Scan closely its published accounts. Mark what 
proportion its realised capital bears to its age and its income. Should you dis- 
cover, as perhaps you will, that an Office boasts of its position as the result of 
years of business, without being able to show invested means equal to a year's in- 
come, set that Office down as tottering, and therefore undesirable as the ague. 
If subscribed capital, premiums, and all have been expended in providing gilt 
gingerbread incident to a start, direct your steps to more economical quarters. 
Begin next to look for genteel professional tricks. Remember that an Eng- 
lish Railway King descended to the kitchen to cook accounts, and that Life 
Assurance luminaries may be tempted to imitate his example. A gridiron is 
not a vulgar thing when handled with kid-gloves. Look out, then, for. cook- 
ing ! It may be that five years' mortality is made to look like that of six, for 
the purpose of establishing credit for care and good fortune in selection. It 
may be that the present value of the ' charge ' on loading has been capitalised 
as well as the present value of the net premium, without also capitalising the 
present value of the future expenses. Mistrust all mystery, all wise winks 
and sagacious shakes, and rest not satisfied till you discover an Office whose 
balance-sheet and mode of dealing accord with your ideas as a common-place 
business-man. "f 

The foregoing considerations iead to three distinct and impor- 
tant conclusions, viz. : — 

* Life Assurance : Us Schemes, Difficulties, and Abuses. 

t Pamphlet by George Sheppard, Assistant Actuary of the Canada Life Assurance 
Company. 



418 EFFECTS OF COMPETITION. 

1. That great knowledge is required for the successful conduct 
of an Assurance Office. 

2. That great integrity of purpose is required on the part of 
promoters and conductors of Life Offices to render them secure 
and prosperous. 

3. That the utmost vigilance and caution is required on the 
part of persons intending to assure, in order to guard themselves 
against being deluded from the solid advantages of quiet and 
well-conducted Offices, into those more showy and ephemeral 
Offices of which modern times have been so prolific. 

It is against the evils implied under the third head that we 
have still further to direct the attention of the reader. The 
author of Life Assurance, its Schemes, etc., says : — 

" It is a bold, and perhaps presumptuous, assertion for the enlightened era 
of 1852 : yet we venture to declare, that notwithstanding the publicity given 
to the scheme, the general public continues to be almost as ignorant of the real 
pretensions and character of Life Assurance as it was a century ago, otherwise 
there would scarcely be found so many ready dupes to the preposterous pro- 
mises of impudent speculators, nor haply so fruitful a supply of those visionary 
and extravagant schemes to which, to the regret of the sober-minded, every 
passing hour is giving birth. Better," continues the writer, " the total obscu- 
rity of former years, than the present glimmering of perception, which only 

enables men to view the subject in a false and delusive light 

The facility with which new Assurance Offices are set on foot, the tempting 
promises with which each new scheme is baited, together with the abuses 
which ill-directed competition amongst the established Societies has intro- 
duced into practice, have, in too many instances, lulled public caution to sleep, 
and converted a scheme of infinite utility and philanthropy into one of the great- 
est speculative projects of the present day. Many miscalled improvements, 
instead of being based on prudent calculations, have been rashly and hastily 
built upon loose hypotheses ; and, so far from ultimately bestowing any pro- 
mised benefits, will only be productive of mischief and disappointment." 

Mr. Samuel Brown adds, in the same strain, "There is too 
much reason to fear that many of the schemes and modifications 
of Life Assurance in the present day have been introduced rather 
by the ardor or the pressure of competition, than by the sober 
judgment to choose only what will, in the end, be mutually bene* 
ficial to the Companies and the assured." The large amount too 
frequently paid away in commission, in order to popularise such 
new features, he justly pronounces as an unnecessary waste to the 
assured, "and a loss to their families which they will some day 
discover and regret." 

Then we have to say a few words about "cheap premiums," 
"gingerbread prospectuses," and the fallacy of great names for 
business purposes. These are all evils to be guarded against, and 
repeatedly enforced, because by these things the unwary are most 
frequently entrapped. The " bonus question " is also one of great 
danger. On all these points, suggestions and cautious will be 
offered. The reader must not be impatient with these details : — 
properly studied, they enable him to combat the schemes and 
devices of a thousand crafty heads who have sedulously stir- 



GREAT NAMES NOT ALWAYS SAFE. 419 

rounded the practice of Life Assurance with apparent advantages, 
the unsoundness of which can only be fully discerned and depre- 
cated by those who have studied, and not those who have simply 
glanced over the subject. 

It is a peculiarity of the popular works on Life Assurance, that 
they continually impress upon the reader that great " caution " is 
required ; but (too frequently) do not furnish the information 
upon which that caution should be based. The tendency, there- 
fore, is to deter the persons consulting such works from assuring 
at all : whereas it is their true purpose to popularise the prin- 
ciple, but to guard their readers against the evils and errors of 
the practice. Too many of the prospectuses issued by the Offices 
themselves have this tendency : and on this point we shall offer 
some special remarks in our chapter to Agents. When the 
reader becomes acquainted with all the great authorities on the 
science and practice of Life Assurance, and when he finds them 
all continuously, and, so to speak, unanimously, pointing to the 
evils and abuses which have crept in, his mind becomes impressed 
with the importance of guarding his friends against them. He 
then acts from the force of conviction, and not simply upon mere 
superficial information, easily acquired, and as easily forgotten. 
It is with this view that we have loaded our text with authori- 
ties; and in the progress of the work we have had numerous 
acknowledgments that our intention has been appreciated. 

We now proceed with our task. Mr. Chaplin, of the Edinburgh 
Life Office, lays it down in his excellent little pamphlet, that 
" the real points to be considered in making selection are of a 
large and prominent kind ; such as the safety and stability of the 
Company ; the rate at which property has been found to accumu- 
late and increase when entrusted to their keeping, and the like. 
Not such very small matters as the payment of two or three 
pounds, more or less, in an operation involving the safety of thou- 
sands." Mr. Currie, in his useful little guide, also urges the im- 
portance of respectability and standing : — " Regard should be had 
rather to the stability of the Company, and its undoubted means 
to maintain its engagements, than to the apparently trifling benefit 
ivhich might arise from lesser payments" Mr. Langley, in his ex- 
cellent Vade Mecum, mentions, more in detail, "The chief points 
to be held in view in coming to a decision on the merits of an 
Assurance Office." These he says are 1. The age of the Com- 
pany, and the financial position obtained in the time. 2. The 
rates adopted, and the Tables of mortality on which they are 
founded. 3. The profits allotted, and if a Mixed Company, 
whether it proposes to become Mutual. 4. The character of the 
Directors. 5. The habits and character of the Manager.* 6. 

* Mr. Babbage offers some remarks bearing upon the question of the influence of Mana- 
gers over the affairs of a Company, and shows how this maybe overthrown : — "Persons 
unable of themselves to form an estimate of the merits of an Office, sometimes judge that it 
must be good from the known skill and ability of the Actuary who conducts it ; and on the 
other hand, if any inconsistency or impropriety in its proceedings is pointed out, the defect 
is almost invariably imputed to the same officer. Now the degree of knowledge possessed 



420 GEE AT NAMES NOT ALWAYS SAFE. 

The peculiar features of the Office." On all the more important 
of these points the reader will already have full information. The 
world would welcome from the hands of Mr. Langley a work 
elucidating the fourth and fifth heads of his summary ! The re- 
cords of the Police and Insolvency Courts would render him some 
aid in his inquiry ! 

But if it should be shown that all the names on a prospectus 
are respectable, it must not be taken for granted, from that cir- 
cumstance, that an Office is in a sound and healthy condition. 
Nearly a half-century ago, Mr. Charles Babbage offered the fol- 
lowing observations on this point :— 

" The readiness with which gentlemen of respectability, wealth, and intelli- 
gence allow their names to be attached to Companies with whose proceed- 
ings they are but little acquainted is much to be regretted It be- 
comes therefore essential for every one to examine and judge for himself, and 
not to be led away when selecting an Office for assuring his life by high-sound- 
ing names. A want of proper attention to this point," he adds, " may be the 
means of occasioning disappointment and loss to the unfortunate individual 
who, whilst following the shadow, loses sight of the substance." 

And still more recently the Messrs. Chambers have found it 
necessary to repeat this warning. In their Journal of July, 1855, 
speaking of " Bubble Companies," they say — " One of the sad- 
dest features of the whole affair is the facility with which men of 
some social, and even political standing, lend their names to coun- 
tenance these concerns. They cannot be always aware of the 
unsoundness; but if they were to take due care before granting 
permission to have their names printed in prospectuses and adver- 
tisements, they could not fail to be warned of the real character 
of the act they are requested to commit. There is, in fact, a 
loose morality in giving names to public institutions without at the 
same time giving personal attention to their concerns, which is al- 
together reprehensible" 

This is hardly a hopeful aspect of things ; but unfortunately it 
is, in many instances, too true. We are gradually approaching 
the financial aspect of the question ; although we can ourselves 
add little to that we have already stated in the chapters on the 
"Finance of Life Assurance," and "Assurance Accounts." 
There are, however, several important considerations attaching to 
this part of the subject, which have been well handled by other 
writers, of which we desire our readers to have the benefit. 

Mr. Samuel Brown says, in reference to the delusive character 
of large figures in reports and balance-sheets : — 

by persons so situated at the different Institutions is exceedingly various, passing through 
all degrees, from the most superficial acquirements, derived merely from the routine of an 
Office, up to the most profound knowledge of the subject. Unfortunately, however, for the 
public, the power they possess is not always equal to the weight which is due to their inte- 
grity and knowledge ; and whatever may be the excellence of any regulation they propose, 
or the advice they offer, it is frequently neutralized by passing through the ordeal of a Board 
of Directors far too intent upon profit, and who in their joint capacity esteem it no degrada- 
tion to sanction measures which they would be very sorry to be considered as acting upon 
in their characters as individuals. , ' We could strengthen this with an instance, if neces- 
sary. 



FIGURES SOMETIMES DECEPTIVE. 421 

" It cannot be too often and too forcibly impressed on the mind of the ordi- 
nary assurer, that the amount of stock in the funds of other securities, which 
he is pleased to consider as capital available for any purpose, but especially 
for the purpose of being divided amongst the members, if, in their opinion, 
it is increasing too fast, is no guide whatever to the actual condition of the 
Society. One Company may have doubled the value of its accumulations, and 
yet be in a state of bankruptcy, by having more than doubled its liabilities ; 
whilst another, with a much slower apparent increase, may be in a position 
to give a large per centage of bond fide profits out of a fund, which may ap- 
pear a miserable pittance when compared with that of its more dashing 
neighbor." 

While the North British Revieicer, with whom the reader has 
now grown familiar, adds the following caution on the bonus 
question : — 

" It further follows, that in proportion as the rates charged for assurance are 
high, the surplus, or profit fund will be swelled and aggrandized. In some of 
the Societies which are still pleased (or we should perhaps rather say, which 
are compelled by their constitution, which they have no power to alter), to 
use the Northampton Table of Mortality, the surplus arising annually is very 
great. In proportion to the amount of such surplus is the power of an Office 
increased to give one class the advantage over another in the division, and by 
the declaration of large bonuses to dazzle the public with imaginary benefits. 
TJie amount of the bonuses periodically declared cannot form a true test of 
the prosperity of any Institution. That amount may arise from using a false 
Mortality Table, and exacting large rates, as much as from getting good lives 
and fortunate investments. 

It becomes incumbent upon him (the assurer) to consider what will be the 
best in the long run, and to remember that as, according to a homely phrase, 
he cannot eat his cake and have it, if he joins a young Office which declares 
two large bonuses during the first few years, while a number of members, by 
dying off, and yet securing their bonuses, run away with far more than their 
fair share of profits, he runs a most imminent risk of not only not securing 
his share of these profits, but even of losing the capital sum originally assured 
to him. We fear that too many Assurance Offices are like spendthrifts, living 
on the produce of their own post-obits ; so that the time must most assuredly 
come when, having lost a certain number of their policy-holders by death, 
they will become bankrupt. Persons have been accustomed to consider their 
life-policies as safe as Bank of England notes, and it has been often observed 
that, except in one or two fraudulent instances, no Life Offices have failed. 
In saying this," continues the writer, " It is forgotten that their liabilities 
have to be solved at a distant day, and that too many, like bankrupt mer- 
chants, may be apparently in great affluence, because their bills have not 
come to maturity." 

This writer quotes the Quarterly Review of October, 1839, in 
which the then existing Offices were classified under four heads, 
viz. : of general stability, a salutary state, lyrobationary ', and experi- 
mental. Under the first, he includes all Offices that have existed 
twenty-one years and upwards ; under the second, those of four- 
teen to twenty-one years; under the third, those of seven to 
fourteen ; and under the fourth those of an existence less than 
seven years. We must, however, caution the reader against 
placing too much reliance on the age of an Office, without taking 
other circumstances into account. 

We have now passed in review nearly all those outward and 



422 KNOWLEDGE NECESSARY TO SELECTION. 

obvious considerations regarding the character and position of 
Assurance Offices, by which persons not familiar with the science 
of the subject, or the inward working of the Offices, can judge of 
their relative advantages. This is one great point accomplished ; 
but it is only one. While no person with this knowledge need 
fall into unsound Offices, it does not follow that it will lead, him to 
appreciate the most advantageous of the sound Offices. As there 
are different degrees of badness, so there are different degrees of 
goodness. A person having the knowledge necessary to discrimi- 
nate between good and bad, will next require to be enabled to 
choose between good and better. In other w r ords, seeing that 
there are different degrees, he will desire the best. It is to this 
latter object that we have more particularly addressed ourselves 
during the progress of this work ; although on arriving at this 
chapter we have felt it incumbent upon us to bring into a col- 
lected form all that appertained to the question of selection. 
While the majority of Agents may have little need of much that 
has been said, there are yet many to whom this rudimentary in- 
formation will be of the greatest service. 

By way of indicating the nature of the branch of the inquiry 
we are now approaching, and by way of introduction thereto, we 
may ask the reader's attention to the dictum of De Morgan : 

" The following considerations might be addressed to any one who intends 
to insure his life : you are aware that the premium demanded of you is avow- 
edly more than has hitherto been found sufficient for the purpose, the reason 
being that it is impossible to settle the exact amount, on account of our not 
knowing whether the future and the past will coincide in giving the same 
law of mortality, and the same interest of money. The surplus arising from 
this overcharge, for the future existence of which it is hundreds to one, is now 
at your own disposal, and you must choose between the one Office and an- 
other, according to your intentions with regard to its ultimate destination. 
Firstly, if you doubt the general security of the plan of Insurance, and are 
desirous of an absolute guarantee, independently of accumulations from pre- 
miums, there are Offices which will, in consideration of the surplus aforesaid, 
pledge their proprietary capitals for the satisfaction of your ultimate demand 
upon them. Secondly, if being of the opinion aforesaid, you think the whole 
surplus too much to pay for the guarantee, there are Proprietary [Mixed] 
Offices which retain a part of the profit in consideration of the risk of their 
capital, and return the remainder. Thirdly, if you wish the surplus pre- 
mium, as fast as it is proved to be such, to be applied in obviating the neces- 
sity of any further overcharges, there are Offices which divide the profits dur- 
ing the life of the insured by the means of a reduction of premium. Fourthly, 
if you wish the surplus to accumulate, and feeling confidence in your own 
life, are willing to risk losing it (the surplus, remember) entirely if you die 
young, on condition of having it proportionably increased if you live to be 
old, there are Offices which divide all or most of the profits among old mem- 
bers. Fifthly, if you would prefer a certainty of profit, die when you may, 
there are Offices which at once admit new members who die early to a full 
participation in all advantages. The choice between these several modes 
must be made by yourself according to your own inclinations, views of fair- 
ness, or particular circumstances." 

Or the learned professor might have added, according to your 
knowledge of the relative advantages of these different modes. 



MIXUTE POINTS OF DIFFERENCE. 423 

We may now enter a little into the details of several of the 
most prominent points of consideration, as just put forward. 

With respect to the relative advantages of the Mixed, Mutual, 
and Proprietary systems of Assurance, these have been already 
fully discussed in a chapter devoted to that purpose. We have 
nothing further to add, and therefore refer the reader back to 
pages 213 and 227. 

Again, on the subject of bonuses, we have simply to refer the 
reader back to pages 332-387. 

On the subject of premiums, a few additional remarks may be 
here offered with advantage. We have already, and more than 
once, referred to the fallacy of " cheap premiums." Still cases 
arise in which cheapness, combined with security, is a decided 
advantage. The Table of premiums, given at pages 294, 295, and 
298, afford the means of arriving at the " cheapness." The mode 
of testing the "security" is a more difficult matter. The usual 
course is to select some Proprietary Office of good standing : 
although the non-participating branches of the Mixed Offices 
offer, in most cases, equal advantages. But by far the greater 
number of policies are issued on the participating scale — and here 
cheapness, unless combined not only with safety but with liberal 
bonus advantages, is an entire delusion. Thus an Office charging 
very lov) premiums, and giving very small bonuses, or none at all, 
may be and will be in the end far less advantageous than an Office 
charging even the highest rates, and giving corresponding advan- 
tages. But an Office charging moderate premiums, and making 
fair bonus additions, is likely to do a larger business than the 
Offices with the very high or very low rates, because, while em- 
bodying the idea of safety, they suit the convenience of a larger 
number of persons. 

It is possible, however, that with two Offices, charging the same 
rates of premium, and bei?ig equally secure, the advantages will 
vary. The first step towards a solution in such a case, would be 
to turn to the " Bonus Table," pages 340-344, and ascertain if the 
same proportion of profits is in each case divided amongst the 
assured. It may happen that one is a Mutual Office, dividing all 
its profits, the other a Mixed Office, dividing only a portion ; or it 
may happen, that in all these outward respects these Offices are 
identical, yet that the bonuses vary considerably. Still, seeking 
a solution, we should suppose that one of the Offices did a larger 
business than the other, and perhaps by that means brought down 
the cost of management to a lower average, and perhaps also se- 
cured less fluctuation in its mortality. But it might happen that 
the Office doing the smaller business gave the best bonuses. In 
that case our mind would naturally revert to several other cir- 
cumstances which, in the aggregate, or even individually, might 
exercise considerable influence. Chief amongst these we should 
require to know the strictness and faithfulness of the medical ex- 
amination, and whether any other than first-rate lives were 



424 COMPARISONS OF PREMIUMS. 

accepted. Next we should inquire as to the energy and ability 
of the management, and, as arising out of this last, the character 
of the investments. These last considerations have indeed much 
more to do with the success of an office, and the realization of 
profits than the mere amount of business effected, or simply the 
proportion of profits divided, can ever have. 

But the question of premiums has yet another bearing. Take 
the case of two Offices giving equal bonus advantages, but vary- 
ing in the rate of premium charged. For the purpose of com- 
parison we will take one Office using the English Life Table, with 
a "charge" of 20 per cent, (as shown at p. 279) and the North- 
ampton Table without any loading, as shown on the same page. 
Assume two persons, A and B, assure for £1,000 each at age 30. 
A pays a premium regulated by the English Table, which at the 
age named would be £24 9s. 2d. per annum, which we may here 
define to be a "moderate" premium. B pays the Northampton 
premium of £26 13s. 4d. — annual difference £2 4s. 2d. ; so that A 
might assure for £1,100 for the same premium as B would pay 
for £1,000, and would therefore, whenever his death may happen, 
have secured an advantage of £100. Such cases are constantly 
to be met with in practice. 

A comparison of the Tables of premiums furnishes the materials 
for testing, in various ways, the relative advantages of Offices : 
but, it must be always remembered, that before any reliable tests 
can be instituted, the element of security must first be settled. 
Now, in looking over the rates of the non-participating Offices, 
we find in several instances that they equal within a few pence 
those charged by Offices which have for many years declared 
large bonuses. Now contrast the positions of two persons, assur- 
ed for £1,000 each; each paying the same annual premium, but 
the one entitled to bonus, the other not. The annual premium in 
the instance now before us will be £24 at age 30 — the reversion- 
ary bonuses of the Office which is before us in this comparison has 
averaged for a series of years 1^ per cent, per annum, being £15 
on the £1,000 policy for each year it has been in force. Now, 
the expectation of life at age 30 is 33 years, which multiplied by 
the £15 gives an advantage to the person assuring in the partici- 
pating Office of no less than £495. This is the reward to be 
obtained by an intimate acquaintance with the subject of pre- 
miums and bonuses, combined with a general knowledge of the 
elements of safety ! 

By way of further elucidating the subject oi premiums, and the 
relative advantages offered by the different Mortality Tables, we 
give the following Table of " net" rates for the ages 30, 40, and 50. 
By contrasting these with the gross premiums actually charged 
by the Offices, some idea may be formed of what the bonus returns 
under sound management should be : — 



5 


£3 7 11 


£4 10 


8 


1 


2 12 


3 12 


5 


6 


2 10 9 


3 11 





7 


2 15 7 


4 1 





5 


2 8 5 


3 7 


3 


9 


2 14 11 


3 18 


6 



TESTS OF STABILITY. 425 

Age, 30. Age, 40. Age, 50. 

Northampton Table, 3 per cent .. . £2 13 

Carlisle Table, 3 per cent 119 

Eq uitable Experience, 3 per cent. '. 1 18 

. . S Males ... 2 2 

Government, 3 per cent, -j Femaleg _ j 17 

English Table, No. 2, 3 per cent. . 2 

Offices adopting even the lowest of these scales, with a fair 
addition of loading, can be worked at a profit. Offices adopting 
the higher scale should certainly offer corresponding advantages. 

What those " corresponding advantages" should be perhaps 
requires a word of explanation. It does not follow that because 
one Office using a premium derived from any particular Mortality 
Table, with a 20 per cent, loading, gives an annual reversionary 
bonus of 1^ per cent, on the sum assured, that another Office using 
the same Mortality loaded at 40 per cent., should give a bonus of 
3 per cent. If, indeed, the loading were the only source of profit, 
such an explanation would not be unreasonable, but as various 
other sources of profit have been enumerated, which will not be 
beneficially effected by the higher rates, but probably, in some 
cases, the operation will be rather the other way, we must take 
all these circumstances into account, and if 2 or 2i per cent, re- 
versionary bonus be obtained, the assured must be content. Such 
a comparison, if pushed to its extent, would, in all probability, 
result in disadvantage to the assured in the high premium Offices : 
but few persons, however, possess the knowledge, or the materials, 
for entering upon these fine-drawn investigations ; nor is it our 
present purpose to enter into such minute details. 

There is one great disadvantage in conducting comparisons of 
the English Life Offices, and that is, that the Offices generally do 
not publish annual accounts and balance-sheets. Those Offices 
which have been compelled to .do so under the original Joint 
Stock Company's Act, looked upon it as a hardship, and no settled 
form of account being provided, each Company, as we have seen, 
has adopted its own form ; and in many instances these forms are 
better adapted to mislead, than to furnish any real information. 
If all the Offices, both old and young, were compelled to render 
annual accounts, arranged under the same form, a simple test 
might be applied for ascertaining their solvency or otherwise, 
and this would be the most obvious method by which to ascertain 
whether the principles upon which they were founded were sound 
or unsound. Many of the best conducted Offices do publish their 
accounts in a clear and intelligible form : and it may be regarded 
as a sign of danger where this is not done. Those Offices which 
do so, reap their reward in a large increase of business. 

Failing this ready means of judging of the position and advan- 
tages of the several Offices, we have to adopt a secondary, and 
far more tedious and less satisfactory course. We have to ran- 
sack the authorities, and charge our memory with all the mah 



426 PLAN OF THE CATECHISM FOLLOWING. 

practices, of which Offices have been found guilty, and also to 
become acquainted with all those points of danger upon which so 
many Offices have struck and foundered. Having acquired this 
information, and also made ourselves familiar with those princi- 
ples which alone can insure the road to success, we have to apply, 
as best we can, the knowledge so obtained to each particular 
Office we desire to scrutinize, with a feeling constantly before us 
that some small error in judgment on our part, or some accidental 
occurrence to the Office, may in a moment overthrow and render 
useless all our deductions and conclusions. For this, in the pre- 
sent state of matters, the reader has no help. 

We may mention one simple test which we have applied to 
many Offices of whose soundness there can be no possible doubt. 
It is, that the accumulated funds of such Offices stand in the pro- 
portion of from four to five times the amount of their annual 
income from all sources. There are many young Offices of which 
such results could not be expected, except through the aid of 
subscribed capital, and which may nevertheless be sound ; but no 
Office which has such accumulations need be doubted. 

It would not follow that an Office with such funds would be the 
most advantageous to assure in. It might indeed happen, that a 
portion of its accumulations had been held back from the pockets 
of the assured. But at any rate such an Office would be safe. 
To judge of the relative advantages of Offices, a knowledge of 
the principles upon which they are based will be necessary. But 
it would not be necessary to know so much of the dark side of 
the question. 

This chapter has already exceeded the limits intended for it, 
and it must now be brought to a close. A portion of its purpose, 
however, remains to be accomplished. This is to bring into a 
concise form not only all that has been advanced on the subject 
of selection in this chapter, but all that in any way bears upon it 
throughout the progress of the work. This we purpose to do in 
a form useful for present and future reference, namely, by a series 
of questions, or a catechism under a simple form of arrangement, 
and marked with references to the parts of the work where the 
points involved in each particular question have been discussed. 
Thus all the points will become connected, their bearing will be 
more fully understood, and the work will become what it was in- 
tended to be — essentially a book of reference. 



CATECHISM 

Of the points upon which Insurance Agents shotdd be informed, 
and should be able to impart information. 

PRELIMINARY QUESTIONS. 

1. — On what Table of mortality are the operations of the Soci- 
ety based ? 156-192, 279-283. 

2. — What "loading " is added to the participating rates for ex- 
penses and contingencies? 279, 282-283, 306, 334. 

3. — What on the non-participating rates ? 308. 

4. — Is the loading equal at all ages ? 174, 280. 

5. — What rate of Interest is assumed to be made on its invest- 
ments? 206-207, 210, 213, 281-283, 304. 

6. — Is the Office Mutual, Mixed, or Proprietary? 213-221, 
227-231. 

7. — What are the legal powers under which the Office is founded 
and protected? 65, 229, 230, 433. 

IF THE OFFICE IS MUTUAL, THE FOLLOWING SPECIAL QUES- 
TIONS TO BE PUT. 

8. — Has, or had, the Office an original guarantee capital ? 

222-226, 228. 
9. — Was that fund raised by Loan or Shares? 231. 
10. — If by Loan, has it been repaid? 231. 
11. — If by Shares, what rate of Interest is guaranteed, and what 

rate paid; and is any bonus added? 227. 
12. — What proportion of the surplus or profits is carried forward 

at each division for the purpose of a permanent guarantee 

fund? 221,228,324-325. 
13. — What is the present amount of the guarantee or reserve fund 

as distinguished from the general funds of the Society ? 

345. 

IF A MIXED OFFICE, THE FOLLOWING SPECIAL QUESTIONS 
WILL APPLY. 

14. — What is the nominal capital of the Company, and in how 
many shares ? 411. 

15. — Are all the shares subscribed for — if not, how many ? 60- 
61, 223, 229. 

16. — What is paid up per share? 411. 

17. — Is the capital fund kept or invested distinctly from the gene- 
ral funds of the office? 234-235. 

18. — What rate of interest is guaranteed, and what paid to the 
shareholders ? 225. 



428 INSUKANCE CATECHISM. 

19. — Is interest paid upon the full amount of the shares, or only 

upon that part actually paid up ? 225. 
20. — Is there any power or compulsion under the Deed or Act, to 

purchase the shares and make the Office Mutual ? 
21. — If so, when, and on what terms ? 
22. — Is any contingent fund or " rest " provided for in addition to 

the paid-up capital, or has any been reserved ? 
23. — Is there any power for increasing the capital? 

IF THE OFFICE BE STRICTLY PROPRIETARY, ASCERTAIN THE 
FOLLOWING POINTS. 

24. — The nominal capital ? 411. 

25. — In how many shares ? 411. 

26. — How much subscribed, and by how many persons? 

27. — How much paid up ? 234. 

GENERAL QUESTIONS APPLYING MORE OR LESS TO ALL 
ASSURANCE OFFICES. 

28. — Is there any power or provision in the Deed or Act limiting, 
or intending to limit, the liability of the assured if the 
Office be Mutual, or of the shareholders if Mixed or Pro- 
prietary ? 230,410. 

29. — Are there any powers, provisions, or stipulations in the Deed 
or Act contrary to, or presenting any unusual variation 
from, those usually belonging to, or employed by Societies 
of its class? 323. 

30. — Has the rate of mortality actually experienced equalled or 
exceeded that indicated by the Mortality Table employed ? 
236, 304, 309-310. 

31. — Has the rate of interest realized on the investments equalled 
or exceeded, on the whole, that assumed to be realized at 
the onset? 236, 304. 

32. — Have the legal powers of the Office been altered since the 
commencement? 410. 

AS TO DIVISION OF PROFITS. 

33. — How often does a valuation for profits take place? 319. 

34. — What proportion of the profits is given to the assured? 
323. 

35. — Does the other portion go entirely to the shareholders, or is 
any portion retained for a reserve fund ? 323-325. 

36. — Do all who are assured under the participating scale partici- 
pate at each division of profits, or only those of a certain 
term of membership ? 326. 

37. — Is the Mortality Table, upon which the operations of the 
Society were based, used in the valuations for surplus ? If 
not, what Table? 315, 358. 



INSURANCE CATECHISM. 429 

38. — In the valuations, is the net premium only valued on the asset 
side? 359. 

39. — If the gross premium be valued, is it placed on both sides of 
the account? 359. 

40. — If only on one side, is a corresponding charge (based on the 
past experience of the Office) placed on the other side ? 
362. 

41. — On what principle is the surplus apportioned — in relation to 
the premiums paid ? By a per centage on the sums as- 
sured ? or by what other method ? 328, 339. 

42. — If by a per centage on the sums assured, does it extend also 
to all previous bonus additions? 329. 

43.— If by a per centage on the premiums paid, what has that per 
centage averaged? 329. 

44. — If by a per centage on the sums assured, what has been the 
rate? 330. 

45. — How soon was the first division of profits made after the es- 
tablishment of the company ? 411. 

46. — Has there been any change made in the time or manner of 
dividing the profits ? 

47. — Has the rate of bonus participation increased, decreased, or 
remained stationary ? 310. 

48. — State the extremes of the variation, if any? 

49. — Does any class of the members receive any special advan- 
tage by reason of long membership, or otherwise? 326. 

50. — Is any portion of the ascertained surplus applied to sickness, 
educational, or endowment funds, or to any other purpose, 
foreign to the purpose of Life Assurance ? 263. 

51. — If so, what portion, and to whom? 

AS TO PROGRESS. 

52. — How long has the Office been established ? 

53. — What is the total number of Life Policies issued ? 

54. — Insuring what amount ? 

55. — How many annuities have been granted? 

56. — How many are now in force ? 

57. — Has the amount of business been progressive, stationary, or 
retrogressive ? 

58. — How many policies were issued last year ? 

59. — Have the expenses of management increased or decreased 
since the commencement? 233. 

60. — What is their present per centage on premium income ? 
236-237. 

61. — Have there been any circumstances connected with the 
progress or history of the Office of more than ordinary in- 
terest ? 

62. — Has the Office amalgamated with, or taken into amalgama- 
tion, any other Company or business ? 



430 INSURANCE CATECHISM. 



AS TO FINANCE. 



63. — Does the Office publish a financial statement or balance* 
sheet? 329,431. 

64. — What is the income of the Office from premiums ? 

65. — What from interest or investments ? 206, 210, 213. 

66. — What is the amount of the total accumulated funds of the 
Office, including the paid-up capital, guarantee, or reserve 
funds? 350. 

67. — How are the funds generally invested? 210. 

68. — Has the Office at any time sustained any serious loss on its 
investments ? 

69. — Is any portion lent on personal security, and upon what con- 
ditions? 262. 

70. — Is any portion of the premiums allowed to remain on credit 
in the hands of the assured? 258. 

71. — What is the total liability on the total existing policies, and 
the bonus additions made thereto ? 

72. — How have the majority of the members applied their portion 
of the surplus — to cash bonuses ? — to reversionary bonuses ? 
or to reduction of the premiums ? 328. 

73. — Is there any special stipulation or limitation as to the appli- 
cation of the bonus ? 341. 

74. — Have the expenses of management, losses, or other contin- 
gencies, exceeded on an average the sum provided by the 
loading of the premiums ? 233. 

75. — What amount has been received for the purchase of Annui- 
ties? 

76. — Has that amount been specially or separately invested ? 315. 

77. — If so, at what rate of interest? 

78. — What is the total amount of claims paid under the Life Poli- 
cies? 

79. — What bonus additions have been added to claims paid ? 

80. — What was paid last year ? 

81. — What were the expenses of management last year? 

82. — Do all the expenses of management fall upon the life funds, 
or is there a fire, annuity, or other branch to bear a portion ? 
267-268. 

83. — Is there any fixed or guaranteed scale for paying out sur- 
rendered policies f 250. 

84. — Has the Office ever, or does it now, assure diseased or un- 
sound lives ? 354. 

85. — Does the Office receive deposits of money carrying interest ? 
438. 

AS TO CONDITIONS. 

86. — What are the limits of travel or residence allowed by the 

Company ? 248. 
87. — If policies become forfeited by exceeding these bounds, by 

what means can they be renewed ? 249. 
88. — Are policies forfeited by suicide, not felo-de-se, or by death 

from duelling, or the hands of justice? 250. 



INSURANCE CATECHISM. 431 

89. — Under what other circumstances do the policies become for- 
feited ? 

90. — Do the policies purport to be indisputable f 255, 266. 

91. — How many days of grace are allowed for payment of pre- 
miums ? 

92. — Does the Office guarantee to pay under the policy, if death 
occurs during the days of grace ? 

93. — Within what period may policies, lapsed by reason of the 
non-payment of premium, be revived, and upon what terms ? 
252. 

94. — Are there any special conditions differing from those above 
referred to ; if so, what are they ? 

95. — How soon after proof of death are the claims paid ? 265. 

96. — What is considered proof of death ? 

97. — Is the substitution of lives permitted? 267. 

98. — Has the Office ever disputed a policy or policies ? upon what 
grounds ? and with what result ? 

99. — By whom are the Directors elected ? 

100. — By whom the Auditors? 

It will be urged, no doubt, that Agents will not be prepared to 
answer many of these questions off-hand. Many of them, indeed, 
do not admit of such treatment. They will vary from time to 
time ; but the Agent may insist upon being supplied with an- 
swers to those he deems most important. Failing this, he has his 
alternative. So the assured, or the person intending to assure, 
may in his turn apply to the Agent for information on such points 
as he deems most important — and failing this, he has his alterna- 
tive ! We trust that this catechism may be the means of causing 
wholesome inquiry ; and that the Offices, iu process of time, will see 
it to be clearly to their interest to afford such information. Those 
who cannot stand this test had better put their houses in order, 
or prepare to be driven from the field by more enterprising com- 
petitors. 

The spirit of seclusiveness, which has long been a characteristic 
of public Companies is now rapidly passing away. Nothing is 
more dangerous in principle, or has been more fatal in practice, 
than the desire to keep shareholders and others interested in pub- 
lic Companies from a knowledge of the true position of their af- 
fairs. Even if misfortunes have occurred, a timely knowledge of 
them may prevent, or greatly mitigate, the evil consequences. 
Two or three of the older Offices which have recently found it de- 
sirable to amalgamate, or rather to transfer their businesses, have 
been noticeable for withholding their accounts from the public. 
Both agents and the assured may do much to remedy such evils 
in the future, by requiring copies of the annual accounts, which, 
in all Companies, are made up for the information of directors and 
shareholders. The voluntary publication of detailed annual ac- 
counts may always be looked upon as a great recommendation to 
an Office. It is a public guarantee of good faith. 



CHAPTER II. 

PUBLICATION OF ACCOUNTS. — LEGISLATION FOR INSURANCE 

OFFICES. 

"A settled system of actual annual audit will probably ere long be instituted, 
and such returns be made in a statistical form, as will enable all the sound 
Offices to establish beyond any doubt their ability to fulfil their engage- 
ments, and to return a large surplus to the persons who insure." — Dr. 
Farr's Twelfth Report. 

The above assurance from Dr. Farr was calculated to afford 
considerable satisfaction to all those who were in any way inte- 
rested in the management of sound Offices, and corresponding 
dismay to those associated with Offices of another class. Unfor- 
tunately this promise has never yet been realized. Not, certainly, 
because the necessity did not exist. That is admitted in all quar- 
ters where impartiality may be expected. It is rather because no 
one has been found with a sufficient knowledge of the subject, 
combined with independence and influence, to carry such a mea- 
sure through the House. This affords another confirmation of the 
adage that what is everybody's business is nobody's business. 
The hour and the man have not yet arrived. 

We have already sufficiently declared ourselves against any re- 
strictive, or perhaps we should say against any prohibitive mea^ 
sures. What is required is protective, and not restrictive, legis- 
lation. In the management tff Assurance and Insurance Offices, 
there are certain well-known conditions necessary. These are, 
speaking generally, — 1. That the expenditure out of premium in- 
come should in no case exceed the proportion which has been pro- 
vided in the calculation of the premiums (as already explained) 
for that purpose. 2. That some guarantee should be provided for 
fluctuations which may occur until the Office has secured a suffi- 
cient share of business to bring it within the operation of the 
well-known laws of average. Both these conditions may be met, 
in the first instance, by a subscribed capital or guarantee fund, 
out of which either excess of expenditure or excess of loss may be 
provided. And a further element of security may be provided in 
this wise : that while it is admitted that no amount of subscribed 
or guarantee capital would provide for continuous excesses in both 
or either of the particulars named ; still, that accounts may be, 
from time to time, rendered, which will enable any competent 
person to determine when an Office has become self-sustaining, 
and whether it continues to be so. 

The actual requirements of the assuring public, then, become 
reduced into very small compass : — first, means of protection ; 
second, means of defence. 



LAWS RELATING TO ASSURANCE COMPANIES. 433 

The road to these objects appears simple and unmistakeable : — 

1. That no Company shall hereafter be constituted without 
some sufficient pecuniary guarantee for the protection of its early 
members ; and — 

2. That periodic accounts and returns shall be rendered, of such 
a character and under such an arrangement as to furnish means 
for testing their continued solvency or otherwise. 

Neither condition will succeed without the other. The penalty 
for non-compliance should be imprisonment to the Managers and 
Directors. The Act of 1 844 contained no such provisions as these 
now named, and no penalties for disregarding the provisions it 
did contain. The Companies' Act of 1862 does make some at- 
tempt to secure information for those who desire it. It enacts 
(sec. xliv.) that every limited Banking Company, and every In- 
surance Company, and Deposit, Provident, or Benefit Society 
registered under its provisions, shall, before it commences busi- 
ness, and also on the first Monday in February and the first Mon- 
day in August, in every year during which it carries on business, 
make a statement in the form marked D in the first schedule to 
the said Act, and as near thereto as circumstances will admit, 
and a copy of such statement shall be put up in a conspicuous 
place in the registered office of the Company, and in every branch 
office or place where the business of the Company is carried on, 
and if default be made in compliance with the provisions of this 
section, the Company shall be liable to a penalty not exceeding 
five pounds for every day during which such default continues ; 
and every Director and Manager of the Company who shall know- 
ingly and wilfully authorize or permit such default shall incur the 
like penalty. It is provided that every member (shareholder) and 
every creditor of any Company mentioned in the preceding section 
shall be entitled to a copy of the above-mentioned statement on 
payment of a sum not exceeding sixpence. How far a policy- 
holder may be considered a creditor has not, we believe, been yet 
determined. 

The particulars required to be stated in form D, Schedule 1, 
above referred to, are as follows : — 

1. The capital of the Company is £ divided into 

shares of £ each. 

2. The number of shares issued is 

3. Calls to the amount of £ per share have been made, 

under which the sum of £ has been received. 

4. The liabilities of the Company on the first day of January 

(or July) were — 
Debts owing by sundry persons to the Company 
On judgment, £ 
On specialty, £ 
On notes or bills, £ 
On simple contracts, £ 
On estimated liabilities, £ 



434 ASSURANCE COMPANIES' LEGISLATION. 

5. The assets of the Company on that day were — 
Government Securities (stating them) £ 
Bills of exchange and promissory notes, £ 
Cash at Bankers' £ 
Other securities, £ 

Further, it is indispensable that all Companies having their 
capital divided into shares, and availing themselves of the Limited 
Liability Law, shall make out and return to the Register Office 
of Joint Stock Companies, Sergeant's Inn, Fleet Street, at least 
once in every year, a list of all persons who, on the fourteenth 
day succeeding the day on which the ordinary general meeting is 
held, are members (that is, shareholders) of the Company, and 
such list shall state the names, addresses, and occupations of all 
the members (shareholders) therein mentioned, and the number of 
shares held by each of them ; and shall, in addition, state the fol- 
lowing particulars : — 

(1.) The amount of the capital of the Company, and the num- 
ber of shares into which it is divided. 

(2.) The number of shares taken from the commencement of 
the Company up to the date of the summary. 

(3.) The amount of calls made on each share. 

(4.) The total amount of calls received. 

(5.) The total amount of calls unpaid. 

(6.) The total amount of shares forfeited. 

(7.) The names, addresses, and occupations of the persons who 
have ceased to be members (shareholders) since the last list was 
made, and the number of shares held by each of them. 

This return may be seen at the office of the Registrar by any 
person on the payment of a fee not exceeding one shilling ; and any 
shareholder may inspect the Register of shareholders at the offices 
of the Company daily (except during thirty days in the year 
when it may be closed) without payment of any fee, and any other 
person on payment of a fee not exceeding one shilling. 

The intention of the Legislature being, that by means of such 
information all persons having any interest in the prosperity and 
security of the undertaking may have ready means of testing the 
same. 

By the same Act it is provided that the Board of Trade may 
appoint one or more competent Inspectors to examine into the 
affairs of any Company (registered under that Act), and to report 
thereon in such manner as the Board (of Trade) may direct, upon 
the application (in the case of a Company having its capital 
divided into shares, and not being a Bank) of members holding 
not less than one-fifth of the shares of the Company from time to 
time issued. But any such application must be supported by 
such evidence as the Board of Trade may require for the purpose 
of showing that the applicants have good reason for requiring 
such investigation to be made, and that they are not actuated by 
malicious motives in instituting the same. The Board may also 
require security for posts before appointing Inspectors. 



LEGISLATION FOR INSURANCE COMPANIES. 435 

It is clear that in the framing the provisions of this Act the 
Legislature simply desired to furnish the machinery necessary to 
enable the public to obtain information ; but the machinery must 
be set in motion by the public or the parties interested. 

It will be observed that many of the foregoing provisions apply 
only to Companies whose capital is divided into shares, or, in 
other words, mixed or proprietary Companies. The Mutual 
Offices are left very much to their own devices, and many of them 
prefer to register under the Friendly Societies' Acts ; although 
we are of opinion that any advantages they may appear to gain 
by this course are more than counterbalanced by the restrictive 
provisions of those Acts. 

It may be useful to state that on the same day on which the 
Companies' Act of 1862 was passed, there was also passed the 
Industrial and Provident Societies' Act (25 and 26 Vic., c. 87) 
which Act repealed the Industrial Provident Societies' Act of 
1852, and all Societies registered thereunder were bound to re- 
gister under this new Act of the same title. No member of a 
Society registered under this Act can have any policy or interest 
in the Society beyond the sum of £200, so that the provisions of 
the Act will not apply to Life Companies higher than the Indus- 
trial class. Indeed, it appears to have been designed, as its title 
would imply, for Provident Societies only, and it gives to the 
Societies registering under it the advantages of the Friendly 
Societies' Acts to the followiug extent, viz. : — 

Exemption from stamp duties and income tax. 

Settlement of disputes by arbitration or justices. 

Compensation to members unjustly excluded. 

Power of justices or County Courts in case of fraud. 

Jurisdiction of the Registrar. 
And, in addition, it also embodies the important provision of the 
Friendly Societies' Act of 1854, that any member may nominate 
the persons who are to receive the benefit of his insurance deposit, 
or otherwise, at the decease of such member, and the person so 
nominated can receive such benefit withoutt he expense and trou- 
ble of administration. 

It may be regarded as certain that our Government do not, at 
least for the present, contemplate any special legislation for Insu- 
rance Offices beyond that now indicated ; and we cannot but feel 
in this respect how much we are behind the United States, where 
departments are specially organized for the supervision of the 
offices and the protection of the policy-holders. We trust the in- 
creasing intelligence of Agents and the Assured may in some 
sort compensate for the much needed protection ; and the increas- 
ing sagacity of the general public may prevent the undue multi- 
plication of new offices, except in cases where they have a good 
solid foundation, and meet some recognized want, and promulgate 
some new and really advantageous feature. 

If the promoters of the twenty-five Assurance Offices whose 



436 KESTJLTS OP THE JOINT-STOCK COMPANIES ACT. 

accounts were published in 1852, and showed an expenditure of 
£287,339 (exclusive of £87,989 paid for claims during the 3-| years 
embraced in the accounts) out of £462,302 received in premiums 
and for annuities — or out of £745,010, if paid-up capital be in- 
cluded — if, we say the promoters of the twenty-five Offices, show- 
ing these results, had been called upon to show some reasonable 
grounds for calling these Companies into existence, it is more 
than probable that the greater portion of them would never have 
got beyond the preliminary prospectuses of their projectors ; and 
a considerable part of the 81 per cent, of the premiums expended 
might have been paid to other Offices where, at least, some regard 
would have been had to the purposes for which such premiums 
had been paid. 

The figures just quoted furnish but a faint idea of the enor- 
mous sums which have been swallowed up by the bubble Compa- 
nies founded under the Joint-Stock Companies' Act of 1844. In the 
Times, towards the close of 1856, was given a far more extended 
list of Companies, showing, in the aggregate, results even worse 
than those just quoted. Here are the remarks which accompanied 
the Table: — 

" Out of 54 Offices comprised in the list, 30 show an expenditure in excess 
of premiums and interest received, and 6 an expenditure not only in excess of 
premiums and interest, but also of capital paid up. That is to say, in 30 
cases the claims on policies, the outlay for advertising, the salaries of the Direc- 
tors and clerks, and the dividends occasionally distributed, have more than ab- 
sorbed all the receipts of the Companies, and have left them in debt either to gen- 
eral creditors or to capital, without the slightest accumulation having been made 
to meet the liabilities on the outstanding policies on which the premiums have 
been received, and the force of which increases with every year of their duration. 
Of the remaining- 24 Offices the expenditure of 22 has been below their receipts, 
and 2 have rendered accounts so unintelligible as to defy scrutiny. Of the 22 
Offices which have kept within the limits of their receipts, several will be found 
only just within the verge, even after an existence of five or six years, and the 
number that can be considered to exhibit other than discouraging features is thus 
rendered very small. It will doubtless be urged in favor of those which 
appear in the worst position that their accounts in most cases extend over a 
shorter time than the others, and that they may hope, when they have attained an 
equal age, to reap the benefit of the risks they have previously run. The value, 
however, even of this slender argument is impaired by the fact that 13 Offices 
appear to have been compelled to dissolve, after having found that this reward of 
a reckless expenditure cannot be relied upon, while 50 have found it either un- 
necessary or inconvenient to send in any returns whatever. It is, moreover, a 
deep disgrace that Institutions whose fundamental object is professedly to en- 
courage provident habits among the people, and to induce them to guard against 
all contingencies, should set a glaring example of dependence upon the lowest sys- 
tem of competition that has ever yet been witnessed." 

And again : — 

" From the above statement it also appears that the total expenditure and 
claims have averaged on the net premium, receipts, etc., 84 - 92 (nearly 85) per 
cent. ; including capital, 63'85 (nearly 64) per cent. The claims alone on the 
net premium, etc., average 23 - 80 per cent. These percentages should probably 
be even greater, as in many instances annuity purchase-money is merged in the 
premium receipts. In some instances it was found impossible to give the 



RECOMMENDATIONS OF SELECT COMMITTEE. 437 

available funds invested and in hand with any degree of accuracy, from the 
vague and unsatisfactory manner in which the accounts are stated. The Com- 
panies carrying on life and fire business are not included in the above state- 
ment, as in many cases the transactions are so amalgamated as to preclude any 
investigation of the separate departments." 

Does it not seem strange that a class of the most valuable of 
all oar public institutions should be left, as it were, open to the 
ravages of any unscrupulous speculator who may please to prac- 
tise upon the credulity of the public? The capital involved in the 
aggregate of the Assurance and Insurance Associations of the 
United Kingdom fully equals that employed in the Banks ; and 
the sums assured in the several Offices is, at least, equal to the 
capital locked up in railways. Why, then, is our legislature so 
indifferent herein? "If a public audit is called for in ordinary 
Companies (remarks Dr. Farr), and would be useful in Banks, 
from which the depositor can withdraw his deposits in a day, 
something of the kind is required in Life Offices, which engage to 
pay their depositors at the end of twenty, thirty, forty, fifty, or 
sixty years ! In the keen competition for present premiums," he 
asks, "is there not some danger that, without such a check, the 
expenditure, and the promises of benefit at that distant day — the 
end of the depositor's life— may be too liberal? " We have 
already shown that these fears are too well founded. 

We need not follow up the arguments of Dr. Farr, as they have 
been mostly already anticipated. He reminds us, indeed, that 
the finance of a Life Office differs essentially from that of any 
other Company : — " Wliile it is advancing to insolvency, its income 
may exceed its outgo for many years ; or it may have a large 
surplus of misappropriated capital, while its annual expenditure 
largely exceeds its income. An ordinary balance sheet is no test 
to its financial condition y and by using bad Tables, assuming 
different rates of interest, operating on different principles, the 
results of valuations, as they are called, may be made to differ to 
the extent of many thousands — hundreds of thousands of pounds." 

The returns he would require from the Companies should em- 
brace " not less than the following particulars." (1) The number 
of policies in force at the beginning and end of the year; (2) the 
number of new policies granted in the year; (3) the number of 
policies lapsing by death, expiry, discontinuance of premium, and 
other causes ; (4) the number of persons assured living and dying 
at each year of age ; (5) the sums assured ; and (6) the premiums 
payable by persons so assured at each age. 

These requirements very nearly correspond with those of the 
Select Committee on Assurance Associations (1853), which it may 
now be desirable to glance at. The following is the portion of 
the report relating to the point now before us ; the Committee 
having, in the preceding paragraph, admitted "that hitherto 
those accounts as published have been of almost unsatisfactory 
character" : — 

Your Committee, therefore, would recommend that it shall be imperative 
upon each Oompamy to make a complete investigation into its affairs at least 



438 



A COMPREHENSIVE BALANCE-SHEET. 



once in five years, as is usually prescribed by their deeds of settlement, and at 
such time so prescribed, which shall show a complete valuation of their risks 
and liabilities, and of their assets to meet the same ; and that all such valuation 
accounts, which may be made for the information and use of their proprietors, 
shareholders, or members, shall be registered in the office of the registrar ; and 
that in each intermediate year between such periodical balance sheets or valu- 
ation, there shall also be registered a statement containing authenticated infor- 
mation on the following particulars : — 

The amount of receipts during the year for premiums on policies. 

The amount of expenses during the year. 

The number and amount of new policies issued. 

The total number and amount of liabilities on all current policies. 

The total amount of premiums receivable on the same. 

The whole amount of capital, distinguishing the manner in which invested. 

How much in cash. 

How much in Government securities. 

How much in mortgage upon real estate. 

How much in other securities, specifying their nature. 

The average rate of interest received upon each class of investments. 

The amount of such investment, if any, on which the payment of interest is in 
arrears. 

The table of mortality and the rate of interest used in calculating the pre- 
miums. 

The evidence which your committee has obtained leads them to believe that 
some such general statement would be of much greater utility in enabling 
the public to come to a correct judgment as to the condition of an Office than 
any form of account that could be adopted. In addition to the above, in case 
of Proprietary Companies, the amount of subscribed capital should be stated, 
and also the amount actually paid up, and how invested. 

It has been brought to the attention of your committee that the business of 
Assurance Offices is becoming every year of a more varied character. 

This your committee regard as the necessary result of the advancement of 
the science on which it is based ; but there is a class of business which some 
Offices have undertaken, viz. : that of receiving deposits of money at interest, 
which appears to your committee totally inconsistent with the business of Life 
Assurance. 

If any additional proof should be required of the necessity 
for some new and effective legislative interference, it is found in 
the fact of the scandalous manner in which the provisions of the 
former Act have been not simply abused, but positively ridiculed. 
Here is the copy of a balance-sheet, actually registered in pre- 
tended accordance with the provisions of that Act : — 

Balance Sheet of the * * * Life Assurance Company, from 1st October, 
1849, to 30th September, 1850. 

RECEIPTS. EXPENDITURE. 



£ s. d. 
Total Keceipts as per 
Cash Book 65,799 10 11 



£65,799 10 11 



TO LIABILITIES. 

Liabilities 109,715 15 1 



£109,715 15 1 



£ s. d. 

By total Expenditure 

and Investment, as 

per Cash Book 63,154 4 

Balance at Bankers . . . 2,645 10 7 



£65,799 10 11 



TO ASSETS. 

To Assets, including 
Balance at Bankers. . 109,715 15 7 



£109,715 15 7 



A COMPREHENSIVE BALANCE-SHEET. 439 

All the purposes for which a balance-sheet can ever be required 
are here openly set at defiance ; and yet the Company making that 
return complied with the letter, if not the spirit, of the Act. Is 
it not, we repeat, time something was done? We hope, when it 
is done, it will be done effectually and well. Nothing, however, 
can be done well, which is not done impartially. Legislation, 
therefore, should reach all the existing, as well as all future, 
Companies. 



CHAPTER ni. 

AGENTS' CHAPTER. 

Containing special instructions for Agents as to making their 
agencies profitable. 

Although we have endeavored in the progress of this work to 
give the best information, and to refer the reader to the best 
authorities — or rather we may say, as we could not expect Agents 
to possess, to any extent, the rare and costly works which have 
been constantly referred to in these pages, to introduce and fami- 
liarize the reader with them — and thus to enable him to become 
conversant with at least so much of the theory and practice of 
Life Assurance as may be necessary to discriminate between good 
and bad — between sound and unsound — offices, there still remains, 
much, very much, unsaid, particularly with respect to the best 
methods of making agencies successful, and therefore profitable. 

The following calculations given by Mr. Henry Lake, in his 
clever pamphlet, " Why is not Life Assurance Universal ?" writ- 
ten several years since, applies to this division of our subject: — 
There are 170 Assurance Offices, each of which has, taking an 
average, 200 agents. The local agents therefore amount to 
34,000. Now, if these agents each sent to their central Office 
one new policy only monthly, it would give 408,000 policies 
in a year, or 208,000 more than the whole number of lives at 
present assured. The whole number of policies effected an- 
nually do not amount to 34,000. 
Of course a great change for the better has taken place since 
Mr. Lake wrote this; but still an enormous increase of business 
may yet be secured by proper and systematic working. Many 
districts of the country are almost unexplored for the purpose of 
Life Assurance. Agents, or suitable persons to become agents, in 
such districts should be up and doing. With a first-class Office, 
some knowledge of the subject, and a determination to succeed, 
many agencies equal to the best that now exist may be formed. 

With respect to the best method of making an agency success- 
ful, so much has been said and written that really nothing new 
can be said. Acting under this impression, we selected from 
amongst muny publications, all having the same object in view, a 
series of papers which some years since appeared in the Life As- 
surance Record, and were subsequently republished in the Agents 
Hand Booh. These are both, long since, out of print. We have 
condensed and selected from these papers much that is valuable 
and important to agents, as a careful perusal of two or three 
pages at the close of the chapter will testify. 



INSURANCE OFFICE PROSPECTUSES. 441 

Of the elements of success, knoioledge of the subject appears to 
us to stand first and foremost. However large the business an 
Agent may be doing, if he makes himself thoroughly conversant 
with the science of the subject, he will do more with this know- 
ledge, which it is the object of the Assurance Guide and Hand- 
book to enable him to acquire. He can acquit himself with cre- 
dit before the learned and the unlearned. He can also throw an 
interest around the subject which his less informed competitors 
can never command. And he can also the better select, from 
amongst the several methods of assurance, that best suited to the 
wants, circumstances, or necessities of his clients. Such an Agent 
need fear no amount of rivalry, provided always that he repre- 
sents a sound, respectable, and well-conducted Office. 

There is one especial point upon which we must offer a word 
of caution, even at the expense of arousing some " official wrath," 
— and that is, do not rely for the success of your agency upon 
the mere distribution of the "prospectuses." All Agents who 
have tried it, know how utterly this system fails. How often 
have we heard provincial Agents exclaim, that they have issued 
all their prospectuses, and " have not received a single proposal 
for assurance." No doubt where persuasion is required, the di- 
rect appeal of the tongue, backed by the knowledge and tact of 
the speaker, will be by far the most effective mode of procedure. 
Still, it occurred to us as strange, that Offices should persist in 
issuing, and Agents distributing, tens of thousands of prospec- 
tuses, without any really practical results. And so curious did 
we feel upon the point that, some few years since, we collected 
the prospectus of every existing Office — then between two and 
three hundred — and (will the reader believe us ?) carefully read 
them all! The result may be told in a few words. Anything 
more unfitted for the particular object in view it would be impos- 
sible to conceive. For the most part, they are crude, illogical, 
and, in many cases, perfectly unintelligible ! No small num- 
ber of them commence by stating how trifling a proportion of the 
assurable classes are assured. In other words, implying that the 
principle is, to say the least, not popular. Fancy a tradesman 
hitting upon the expedient of inviting customers to his shop, by 
posting up over the door a notification of the small amount of 
patronage he enjoyed ! Would not every one button up his 
pocket and pass on ? Apply the rule to the sale of insurance poli- 
cies ! Any one who has studied human nature knows how prone 
all are to follow, but how few have the courage to lead. Why, 
then, hold Life Assurance forward as the exception, and not the 
rule, and try by this unusual process to secure converts ? Before 
Life Assurance becomes really popular, we shall expect to see a 
great change in the character of insurance prospectuses. 

But while most of the compilers of prospectuses are content 
to make them simply catalogues of rates, tables, limitations, and 
penalties — rendered still less inviting by the free use of techni- 



442 PEACTICAL SUGGESTIONS FOE AGENTS. 

cal terms — there are some of a precisely opposite character. 
These go quite to the other extreme ; and, in the plenitude of 
their promises, promise " everything to everybody I" It was of 
this class of prospectuses that Mr. Babbage with justice remarked 
— " Some of these productions would appear, from their composi- 
tion, rather to be addressed to those thoughtless people whose 
credulity is periodically duped by the splendid promises of the 
lottery, than to a class whose forethought and prudence are so 
decidedly evinced by the very circumstance of their desire to pro- 
vide against the uncertainty of life." It was in reference to this 
class, and to those who combine " cheap premiums " with their 
other manifold advantages, that Professor de Morgan said, tC The 
magnificent style in which the prospectuses frequently indulge 
might often remind their readers of the unparalleled benefits 
which are promised by another description of traders who vie 
with each other in describing the rare qualities of their several 
blackings ! If there be in this country (he adds) a person whose 
ambition it is to walk in the brightest boots to the cheapest Insu- 
rance he has my pity Public, ignorance of the 

principles of Insurance is the thing to which these advertisements 
appeal" Happily this evil is gradually dying out ; for, of the 
two, it is by far the worst. Better that a person should never 
assure at all than become the victim of an Office compelled to 
resort to such disreputable puffs ! 

But there is the middle course. Nothing can be much more 
instructive or amusing than the mortality observations upon 
which the science of Life Assurance is built up. The Manager of 
an Assurance Office is supposed to have this knowledge at his 
fingers' ends. The Actuary must have it. Why not then, apply 
it to illustrate the uncertainty of individual life, as it is employed, 
on a larger scale, to exhibit the certain average of life to the 
masses. Then people would seek Life Assurance on its merits. 
Then its principles would become appreciated, and its practice 
popular. We hope soon to see a change in this direction. We 
now introduce the reader to the papers referred to, and bid the 
agents " God speed" in their good work ! 



AGENCIES. 

CHAPTER IV. 

- THE PRACTICAL WORKING OF INSURANCE AGENCIES. 

As regards the successful working of Agencies, there can be little 
doubt that the success of an Agency depends almost entirely 
upon the Agent himself, as however excellent the principles 
and great the advantages of a Company, it will avail but little 
in a provincial town, unless these advantages be well made 
known, and continually kept before the persons most likely to 
assure their lives. The great element of success in this mat- 
ter appears to be comprised in the one word — perseverance : 
and that a good life agency is well worth the pains necessary 
to make it successful may be readily understood, when it is 
considered that if a life policy is once effected, the average 
length of time during which it continues in force, and during 
which the Agent is consequently receiving his commission 
upon it, maybe stated at over twenty-five years ; and suppos- 
ing therefore that a policy is obtained which returns a com- 
mission of £1 annually, and which is supposing but a moderate 
amount assured, the value of the commission on this one 
policy, with compound interest, at the end of twenty-five 
years, is very considerable. It is also to be borne in mind, 
that when a certain number of assurers are obtained, their 
example tends greatly to facilitate the effecting of other 
policies. 

That the results of an agency depend more upon the agent than 
even upon the nature and advantages of his Company, is 
clearly demonstrated by the numerous instances in which a 
considerable business is done by the agents of Companies 
whose claims upon the public are by no means powerful; 
while in the same town another Office, offering the greatest 
and most solid advantages, effects scarcely a policy. 

When a person obtains the agency of an office, and finds it more 
difficult to effect policies at first than he imagined, he too fre- 
quently puts his papers carefully away in a drawer, and 
determines to wait until some new one applies to him, and, 
as a natural consequence, his neighbors, instead of coming 
to him, resort to some other agent in the town, who takes a 
more active interest in the subject; for the ordinary extent 
of knowledge possessed by the public upon the subject of 
Assurance, is certainly not sufficient to carry business into the 
hands of an agent who leaves unexplained the merits of a first- 
rate Office, while another agent takes care that the advantages 



444 PRACTICAL SUGGESTIONS FOE AGENTS. 

of his Company (fewer though they be) shall be kept before 
the eyes of every one in the toicn. This explanation of the 

ADVANTAGES OF THE PARTICULAR COMPANIES REPRESENTED, 
TOGETHER WITH THE VALUE OF ASSURANCE AS A PRINCIPLE, 
IS UNDOUBTEDLY THE GREAT ELEMENT OF SUCCESS IN AN 

Agency. There is scarcely an Office that does not offer some 
advantages, which, if well brought out by the agent, may 
serve to incresase his business — such as stability and security 
— large returns of profits, or low premiums — various modes of 
effecting Assurance — strictly honorable conduct, etc., etc. 

Persons who hold an agency without having quite the same ad- 
vantages upon the score of rank and influence as some more 
successful agent in the neighborhood, are apt to imagine 
that this success is entirely the result of his more influential 
position. It may, however, be asserted with safety, that to 
work a Life Agency successfully, provided the agent's charac- 
ter be such as to entitle him to the respect of his neighbors, 
only requires a knowledge of the general principles and 
application of Life Assurance, a thorough knowledge of the 
peculiar advantages offered by his office, and perseverance 
in making them known. But experience tends to prove 
that, however well an agent may distribute prospectuses, or 
exhibit a show-board, or advertise for his Company, unless he 
follow this up by personal communication and explanation, 
he will not effect his object. 

There are in every town numbers of persons who have never 
entertained the subject of Life Assurance for a moment, but 
yet whose families stand as much in need of its protection as 
their houses and property require to be secured against fire, 
which the same persons would on no account neglect. 

We cannot leave this subject without endeavoring to impress 
upon the minds of all persons holding the agency of a Life 
Office, the importance and desirableness of their setting a 
good example to their friends, by assuring their own lives, 
even if their circumstances fortunately render it unnecessary, 
as a provision for their families. A policy in a good Office 
may always be looked upon as a profitable investment of 
money, as, after a number of premiums have been paid, it 
becomes a marketable commodity ; and the confidence inspired 
by an agent assuring his own life, frequently produces effects 
which repay four fold the premiums on his policy. 

It would seem at first sight scarcely necessary to suggest to pro- 
vincial agents the desirableness, and, indeed, necessity for 
their being tolerably well informed upon the subject of Life 
Assurance, and especially as to the peculiarities, methods of 
Assurance, and advantages offered by their respective Offices / 
yet there is little doubt that to this cause may be traced in 
many instances the want of business. An agent who intends re- 
ally to prove himself of utility to his Company, and to make his 



PRACTICAL SUGGESTIONS FOR AGENTS. 445 

agency valuable to himself, must not be content with merely 
reading over his official prospectus, and making himself 
acquainted with the rates of his Office. To carry out properly 
the objects of an agency, the agent should make himself 
master not only of the principles of Assurance, in order to ex- 
plain the advantages and utility of the system, but should 
also be sufficiently conversant with its details and applications, 
to be able to arrest attention, and interest his neighbors, and 
also to assist them in selecting a method of Assurance suited 
to their particular circumstances. 

We would strongly advise our readers who may hold agencies, if 
there be any points connected with their business that they 
do not clearly comprehend — such, for instance, as the various 
methods of Assurance offered by their office — the mode of 
dividing profits, etc., etc. — not to remain in doubt, but write 
at once to the Secretary or Manager of the Company for 
information, which we are certain would be at all times 
courteously and promptly given. 

The points to which we would venture to direct the attention of 
agents, as being more particularly suited to bring home to 
other persons the value of the subject, and which we would 
suggest their making themselves conversant with, are, the 
general applicability of Life Assurance, the great variety of 
situations in life to which it is adapted, and, indeed, the small 
proportion of persons who would not in some way or other 
derive benefit from it. The intention and peculiar value of 
the different modes of Assurance, such as participating and 
non-participating scales — ascending and descending scales — 
single and joint Life Assurances — survivorship Assurances — 
and also (where they are granted by the Company) with 
immediate and deferred annuities, family endowments, etc. 

In provincial towns, from the inhabitants being so much better 
acquainted with each other's circumstances than in large 
cities, an agent has a better opportunity of suggesting a 
mode of Assurance suited to a particular condition, and con- 
sequently more likely to be appreciated by the person to whom 
it is suggested. 

It is also desirable, and indeed necessary, for an agent to be well 
acquainted with such particulars as the following: — If his 
Office charges high rates of premiums, he should be able to 
explain the advantages given in return, or he will stand a 
chance of being confounded by some such answer as the 
following, from persons to whom he may have suggested an 
Assurance : — " I shall be very happy to assure my life with 
you, but I find I can do it for 10s. a year less in such an 
office, and in these times we must save all we can," etc. 
Now it is very possible that if the agent be properly ac- 
quainted with the advantages derivable from his own Office, 
he may be able to convince his friend that he will not lose 



446 PRACTICAL SUGGESTIONS FOR AGENTS. 

anything by assuring with him, and perhaps even be even- 
tually a gainer. 

Again, the agent to an Office which charges low rates of premium, 
and consequently makes little or no return of profits, will of 
course find that the first and most important point is, to be 
able to show his friends that they will be perfectly secure in 
choosing his Office 

The simple fact of an Agent being evidently well acquainted 
with the business of Assurance, is in itself a great way to- 
wards giving other persons confidence in the Company he 
represents. In comparing the charges made by a Company 
with the rates of other Companies, it is not sufficient to take 
any one particular age for the purpose, as it sometimes hap- 
pens that a Company whose rates for young lives appear 
high, may take the older lives at a lower rate than an Office 
whose rates have the reputation of being much lower. In, 
the present age of competition it is very necessary to con- 
sider these things, in order that no advantages may be lost 
sight of that may assist in obtaining policies. 

If, in the publication of this little work we shall have succeeded 
in persuading the provincial agents to take a warmer interest 
in the subject of Life Assurance, and to give it the attention 
it so well merits, we believe much will have been done 
towards increasing the number of assurers, and the value of 
the agencies, to which we most devoutly say, Amen. 

The field from which a harvest may be reaped is before us ; but 
before reaping, comes sowing. The public mind must be in- 
formed as to the advantages of Life Assurance before Assu- 
rances can be obtained, and they are obtained in proportion as 
that information is extended. Now, if the agent will make 
known the benefits of Assurance within the circle of his own 
friends, acquaintances, and connections, he may fairly ex- 
pect to get out of that sphere some business. Patience and 
perseverance are ordinarily well rewarded. 

A shrewd agent watches for good opportunities, and they are by 
no means few. He also watches against unfavorable circum- 
stances, for they are numerous also. He does not urge his 
friends to assure ; that might be deemed an unbecoming 
interference ; but he shows in clear and forcible language the 
advantages of the system. He does not lecture them on their 
duty to assure ; but he leads them gradually to see that it is 
their duty. 

Many favorable opportunities for getting business will occur in 
the course of an agent's practice. They will not be all in one 
class of circumstances* but will present themselves in varied 
forms. 

Having obtained a proposal a successful agent [known to the writer] 
addresses the usual inquiries to the referees, and, where it 
is possible, conveys the letters himself. This gives him an 



PEACTICAL SUGGESTIONS FOE AGENTS. 447 

opportunity to speak on the subject of Assurance to the 
parties referred to, who may be entire strangers to him, and 
not otherwise accessible, and being a chatty, lively man, he 
soon makes himself agreeable, and the result, in more than 
one instance, has been that he has obtained an Assurance from 
one or both of the persons referred to in the original pro- 
posal. This success has partly arisen from his own suggestion, 
but perhaps mainly from the circumstance, that persons are 
willing to follow the steps of a friend in a course which they 
believe to be advantageous, although they may not have 
sufficient boldness to lead the way ; another principle in man 
which may often prove serviceable to an agent. 

Why are fewer Life Assurances effected in proportion in small 
than in large towns ? The answer frequently given to this in- 
quiry is," That the inhabitants of large towns are usually better 
informed than those of small towns, and, therefore, better able 
to appreciate the advantages of Life Assurance." We repeat, 
that we consider this an unsatisfactory reply. 

We think we can trace the cause : Upon calling to mind the 
nature of the Life Assurance business done in the larger 
towns within our own observation, it almost always appears 
that the greatest portion of the business is in the hands of 
two or three working agents, men who understand and ap- 
preciate the subject, and who have each used a large amount 
of diligence, perseverance, and discrimination in establishing 
their business; and no doubt have afterwards become too 
much alive to the value of it, when once established, to 
allow it to diminish. 

We could also illustrate our view on the subject, by naming 
several important towns in which scarcely any Life business 
had been effected until an agency was taken by such a person 
as we have described, when the value of the principle having 
been made a subject of conversation, and in various ways 
brought prominently before those likely to avail themselves 
of it, more business has been done in one year than had been 
effected in the previous ten. 

In the same way in the small towns, where occasionally we find 
an agent or two of this stamp, the inhabitants are invariably 
as well informed upon the subject, and as ready to apply 
its advantages to themselves, as those of the largest towns. 

We would invite the agents in all small towns to consider this 
matter, and if their neighbors are more alive to the advan- 
tages of Assurance than usual, to think whether it has not 
been caused in the way we suggest ; and if, on the contrary, 
the work has yet to be done, to remember that there is scope 
for exertion in the smallest town, and that, without much 
trouble, the importance of Life Assurance, and the advantages 
that any particular Society may possess, can be brought under 
the notice of almost every person. 



448 PRACTICAL SUGGESTIONS FOR AGENTS. 

It is to be feared that an idea sometimes prevails, that where little 
has been done, but .little is likely to be done / but experience 
has shown such reasoning to be erroneous. Indeed, to prove 
this, it would only be necessary to understand the circum- 
stances of individuals, when it would be found that the 
majority of those who have never given a serious thought to 
Life Assurance, are persons to whom its effects would be 
most beneficial. 



DIVISION VII 



SUPPLEMENTARY 



CHAPTER I. 

MARINE INSURANCE. 

ORIGIN OF UNDERWRITING. 

Marine Insurance is the oldest form of underwriting ever prac- 
tised. Pocock says that the proportionate hazard of different 
voyages, which constituted the essential qualities of marine insu- 
rance, appears to have been understood so early that something 
approaching to the principle was employed in the latter ages of 
Rome, by which vessels lost at sea, or taken by the enemy, were 
to be replaced in return for supplies furnished to the army in 
Spain. " This agreement of indemnification," he remarks, " may 
be considered an assurance, though defective in the modern con- 
dition of a premium." 

Only in a remote sense, however, could such a transaction be 
termed an insurance ; and it is pretty certain that the Lombards 
were the earliest of European states in the use of insurance, pro- 
perly so called. The policy of marine insurance, even of the present 
day, is an antique form of contract used by the Lombards, to 
which fact there is reference in the instrument itself; and so early 
as 1620, policies made at Antwerp are expressed to be made " ac- 
cording to the custom of the Lombards, in Lombard Street, 
London." 

A recent writer thus discourses on the point in question : — 

" It is said that this lesson of doing well was taught us by bankers and 
traders in the soft and sunny countries of Upper Italy. A colony of Lombard 
merchants settled in London six hundred years ago, and taught our thriftless 
ancestors (more concerned, we fear, about falconry and shooting the bow than 
with death, or want, or disaster) the lesson of insurance. These Lombards, 
being traders, confined their insurance to ships. But a great fire came, and 



450 EAELY HISTORY OF MARINE INSURANCE. 

London was laid in ashes, and amid the ruins of the smoking city its unhappy 
people, learning the sad lesson, applied the same principle to their homes. It 
was a contract with fate, and thenceforward the Englishman's house, which 
was his castle, and his ship, which was his castle's outer wooden wall, were 
well shielded from fire and tempest." 

In that excellent compendium, the Commercial Instructor, the 
origin of Insurance is dated January 28th, 1532, at Florence, 
as invented by five specified merchants, under a form of policy 
said to be still in use at. Leghorn. But we must go further back ; 
for in the year 1435 a Spanish writer issued a challenge to the 
world, claiming for Barcelona the honor of being the birthplace 
of this practice. The claim was met by the Italians, who quoted 
the rates of insurance on shipments from London to Pisa and 
Bruges as early as 1400. It was also ascertained by a chronicle 
of King Ferdinand that the contract of reciprocal insurance was 
known in Portugal as early as 1375. Many other writers allude 
to the practice of indemnifying ship-owners and merchants against 
losses by the elements, or by enemies, at a much earlier date. 

The following is from the New American Encyclopaedia: — 
Marine Insurance was wholly unknown to the Greeks and the 
Romans and the oriental nations. Chief-Justice Coke (6 Rep. 
47), about 1588, notices the practice of insurance as a mere nov- 
elty ; and the first English statute which recognizes it is 43 Eliza- 
beth, c. 12 (1601) ; it designates the system as of " tyme out of 
mynde, and a usage amongste merchants." But the 66th section 
of the laws of Wisbuy (a maritime code published, probably, 
about 1250) speaks distinctly of it. Some suppose this a subse- 
quent interpolation, but it is at least possible that the practice of 
insurance was more or less common among merchants even cen- 
turies before it was recognized by law. 

Assurance or Insurance — a contract by which one party, in 
consideration of a stipulated sum, undertakes to indemnify the 
other against certain perils or risks to which he is exposed, or 
against the happening of some event — is one of the few institu- 
tions for which we are not indebted to the customs, learning, and 
civil polity of the Romans, embodied in that inexhaustible mine 
of wealth, the Corpus Juris Civilis of the Emperor Justinian. 
The early maritime codes of the middle ages, compiled on the 
revival of commerce and learning, are also silent on the subject 
of Insurance, except the laws of Wisbuy, which appeared in the 
Tudesque or Teutonic language, in the latter part of the four- 
teenth century, and contain the first authentic allusion to the con- 
tract of Insurance. 

Marine Insurance w T as first introduced by the Italians, or Lom- 
bards, about five hundred years ago, the term " policy" {polizza) 
being of Italian origin. 

In 1681, the Common Council of London, in consequence of the 
K Great Fire" of 1666, resolved to undertake "ye insuring all 
houses within this citv and liberty from fire ;" but this scheme 



EAELY HISTORY OF MARINE INSURANCE. 451 

having proved unsuccessful, the " Hand-in-Hand Fire Office" was 
established in 1696, and the " Sun Office" in 1710. 

From the First and Second Annual Reports of Hon. William 
Barnes, we condense the following learned and valuable account 
of the rise of Insurance : — 

"Water comprises more than three-fourths of the surface of the globe. 
The ocean, from the earliest ages, has been the theme of poetry and eloquence, 
and it has always tempted the adventurous and daring spirit of man, while 
its constant swell and continuous flow fitly emblem the eternity of the distant 
past and the unfathomable future. 

" The dominion of the sea has for ages been accepted as the insignia of the 
most exalted national rank and power ; and that common heritage of the 
whole human race and of all nations has often been claimed by one alone ever 
since the Carthaginians swayed the Mediterranean. Carthage itself, with all 
its maritime power, yielded to Rome, and another era records the symbolic 
marriage of the Adriatic Sea with the ancient Venetian Doges. Other cen- 
turies witness Spanish and Dutch supremacy on the ocean, and in modern 
times the caveat is scarcely yet withdrawn, that ' Britannia rules the waves.' 

" The common notion that the ocean is only a vast expanse of fathomless 
water is soon dissipated by actual experience, or by a scientific knowledge of 
its physical geography. Its vast area, its numerous rocks and shoals, its cur- 
rents and its storms, and all its impediments to safe navigation, not only 
demand the constant vigilance of man when he uses this magnificent roadway 
of commerce, but opens a wide field to his investigation and research. 

" Standing at the base of Insurance economics as the eldest and one of the 
most important of its now varied departments, and considered as of universal 
prevalence and undisputed advantage in the mercantile world, the science and 
practice of marine underwriting is not only commercially but historically in- 
teresting. 

" The citizens of Tyre were the most celebrated navigators of ancient his- 
tory ; with their ships, built of the timber from Mount Lebanon, they even 
ventured so far as to discover the shores of Britain. The Phoenicians/or an- 
cient Canaanites, a name signifying merchants in the Oriental language, 
planted maritime colonies in different countries as early as 2000 years B.C. 

" The Phoenicians, Carthaginians and Egyptians, the Athenians and other 
Hellenic nations, have left us no record of their maritime laws, if their sea 
usages ever became so established and numerous as to require separate col- 
lection and preservation. 

" The first maritime code of which we have any authentic evidence, is that of 
Rhodes, a beautiful island in the Mediterranean Sea, off the coast of Asia Mi- 
nor. This code is supposed to have originated during the reign of Jehosha- 
phat in Judah, about 900 years B.C., and it was therefore nearly contemporary 
with the era of Solomon in Palestine. The Rhodian laws were adopted by 
the Romans as authoritative, except where they conflicted with their own 
special regulations, and we are indebted to the Code of Justinian and the wri- 
tings of Roman lawyers for the preservation of excerpts from these ancient 
commercial regulations. One title of the Digest relating to the subject of jet- 
tison is entitled, Be Lege Rhodia de Jactu (14, 2) ; the Rhodian law has thus 
furnished for nearly three thousand years the foundation of the principles of 
general Average prevailing among all commercial nations. But from the end- 
less variety of circumstances and combinations occasionally attending the set- 
tlements of general Average and Marine losses, the decisions of Average ad- 
justers, resting on mingled law, usage, and equity, are not, even at this date, 
always uniform and concordant. 

" The modern contract of marine insurance was not known to these nations, 
nor even to the Romans ; although the latter nation approached somewhat 
its main features in the usage which prevailed in cases of warlike stores and 
provisions conveyed by sea for the Roman troops, the government assuming 



452 EARLY HISTORY OF MARINE INSURANCE. 

tlie risk of loss arising from perils of the sea and from capture by enemies and 
pirates. The Emperor Claudius also accelerated the importation of grain into 
Italy during a famine, by assuming the damages which might result from 
tempests. A workman also who undertook to set precious stones, might at 
his option, burden himself with the loss, through fortuitous events, of the 
articles entrusted to him, and the same principle was applied in other cases. 

" The contract of bottomry and respondentia (fcenus nauticam, pecunia tra- 
jectitia, a grosse aventure), or a loan on the responsibility of the ship or cargo, 
in the nature of a mortgage, conditioned to be repaid only with a high or un- 
limited rate of interest, if the voyage should prove successful, was well known 
to the Athenians and Romans, and minutely governed by many special regu- 
lations, some of which prevail even at the present day. The formula of bot- 
tomry contract used in France and other countries during the present century 
has been traced back even to the era of Demosthenes, and has therefore ac- 
tually been in vogue over two thousand years. The Justinian Code, promul- 
gated in a.d. 529, and the Basilica of the Eastern Empire, compiled in a.d. 
877, both limited the rate of nautical interest to twelve per cent, per annum. 
It is asserted that this natural maritime contract was also understood and 
practised by the ancient Hindus. It undoubtedly formed the ancient and ori- 
ginal basis of Marine insurance, although it has now almost fallen into desue- 
tude among modern commercial nations, having been superseded by the con- 
tract of insurance and other new mercantile inventions and usages of modern 
times. 

" About the year a.d. 350, a party of Roman emigrants destined for Constan- 
tinople were shipwrecked off the coast of Salerno, in Southern Italy ; and the 
adjacent harbor of Amain having attracted their attention, they at once began 
to lay the foundations of that celebrated city which was destined soon to be- 
come the most powerful commercial emporium of this epoch. Its maritime 
Code, compiled in 1063, known as the Amalfitan Table (now entirely lost), 
became dominant on the shores of the Mediterranean and throughout the Le- 
vant. The High Court of Admiralty of Amalfi even obtained authority and 
sanction as a tribunal of nations. 

" An ordinance on navigation was adopted at Barcelona as early as 1258 

" The earliest code of maritime law in modern Europe, now extant, is the 
Consulat de la Mer, Consulado del Mar, or Gonsolato del Mare. It is a singular 
fact that the origin of this authoritative compilation is unknown, although it 
has ruled the Mediterranean sea and the shores of Europe for centuries, and 
formed the basis of nearly all subsequent maritime codes. Its origin seems 
to have been most authentically traced to Barcelona, in Spain, then ruled by 
the kings of Aragon, where it was first promulgated in the Romana or Cata- 
lan tongue in the 12th or 13th century. It was a complete digest of the then 
existing maritime laws and usages, and contained two hundred and ninety- 
four chapters. The commercial republics and flourishing cities which arose 
in Italy and on the Mediterranean after the destruction of the Roman Empire 
in the West — Pisa, Genoa, Venice, Ancona, Marseilles — adopted the Consolato 
del Mare, or promulgated special marine ordinances of their own, mainly 
founded on the Consolato. 

" The Jugemens, Boole, or Role d'Oleron, was compiled under the patronage 
of Queen Eleanor, Duchess of Guienne, and named from her favorite island of 
Oleron, at the mouth of the Charente, on the shore of France. The Ordon- 
nances or Laws of Wisbuy are supposed to have been promulgated in the year 
1288 by the rich and famous commercial city of that name, situated on the 
island of Gothland, off the coast of Sweden. Both these Codes claim almost 
as ancient an origin as the Gonsolato itself ; but neither of them refer to the 
modern contract of Insurance. 

" In the latter part of the seventh century, the Roman fugitives who had 
taken refuge from the Northern barbarians on the desolate Venetian islands 
on the shores of the Adriatic Sea, compelled by their necessities, began to ac- 
quire commercial importance ; and when the maritime supremacy of the other 
Italian cities, Amalfi, Pisa, and Genoa declined, Venice rose to the first rank 



EARLY HISTORY OF MARINE INSURANCE. 453 

as a naval power, and from the most distant shores of the Black Sea to the 
coast of England she enjoyed an extensive and flourishing- commerce, and ob- 
tained a recognized superiority in navigation and naval architecture over all 
other European or Asiatic nations. In the year 1177, Pope Alexander III., 
havinof been compelled to seek a refuge in Venice, granted to the empire, 
with his ring, the sovereignty of the sea. In 1255, a maritime statute, which 
is still extant, was adopted, consisting of one hundred and twenty-nine arti- 
cles, entitled, Statuta et Ordinamenta super Nambus. The pompous cere- 
mony of the marriage-ring annually thrown into the Adriatic, in celebration 
of the espousals, was no idle and meaningless rite of that long line of Vene- 
tian Doges which ruled for eleven hundred years, (a.d. 679 to 1797.) 

" The Hanseatic League, which is supposed to have originated about the year 
1241 by the union of Hamburg and Lubeck, soon embraced, with the per- 
mission of their respective sovereigns, eighty-five commercial cities, especially 
those of the North and Baltic Seas. The laws of Oleron and Wisbuy consti- 
tuted at first their marine code ; but in 1591 a maritime code was promulga- 
ted by the Hanse towns, which was afterward enlarged, and known as the 
Jus Ranseaticum Maritimum. This imperial League flourished for more 
than three hundred years ; its objects were to repress piracy, procure restitu- 
tion of shipwrecked property, facilitate the safe navigation of the seas, and 
establish trade, fisheries, commerce, and manufactures. Bruges, in West- 
Flanders, was established in 1252 as one of its leading cities, and soon became 
the commercial centre of Northern Europe. In 1272, a colony or agency was 
established at Novogorod, Russia, and in 1278, one at Bergen. Norway, Den- 
mark, Sweden, and Germany were subjected to the sway of these merchant- 
princes, who loaned ships of war to kings, and for many years exerted a con- 
trolling power over several nations, and almost monopolized with their nume- 
rous mercantile marine the commerce of England and of Northern Europe. 
About the year 1250, the German merchants of the Teutonic Hanse, or ' East- 
erlings,' were encouraged by Henry III. to settle in England, and were grant- 
ed a patent, erected into a corporation under the title of ' The Steel- Yard So- 
ciety,' and endowed with special privileges, which they retained for more 
than three centuries, and until the reign of Edward VI., when the national 
jealousy became excited against them, their privileges were withdrawn, and 
England began to feel the first throbs of that intense ambition for commercial 
and manufacturing supremacy which afterward became so signally success- 
ful. Henry VIII., from a mistaken policy, banished thousands of Belgian 
manufacturers ; and finally, under Elizabeth, the connection of England with 
the League was dissolved by the seizure and confiscation of sixty Hanseatic 
vessels engaged in smuggling ; and the English, who had previously pur- 
chased Hanseatic ships built in Baltic ports, commenced learning the art of 
naval construction and the building of their own vessels. The Act of Navi- 
gation, which secured the carrying trade to English shipping, was also passed 
in 1660. (12 Gar. II cap. 181.) 

" The Dutch gradually supplanted the Hanseatic League, which was formally 
dissolved in 1630, and Antwerp and Amsterdam became for a brief period 
great ship-building marts and the acknowledged centres of the commercial 
world. Holland, by her manufactures and commerce, her colonies and ship- 
ping, outranked any other nation. 

" The justly celebrated Ordonnance de la Marine, originally inspired by the 
genius of Colbert, and subsequently illumined by the Commentary of Valin, 
was compiled under Louis XIV., in 1681, and attained great celebrity and 
authority as a marine code, most of its legal principles remaining unchanged 
to the present day. One article interdicted the practice of Life Insurance. 

" Other maritime codes and compilations of lesser note were published, among 
which were the Reglemens of Charles V., published at Brussels in 1551 ; the 
Guidon de la Mer, of Rouen, composed about the year 1600 ; the Notabilia de 
Nambus et Nauto, item de Assecurationibus, by Francesco Rocci or Roccus of 
Naples, published in 1655 ; the TJs et Goutumes de la Mer, by Stephen Cleirac 
published at Bordeaux in 1661, etc. 



454 EARLY HISTORY OF MARINE INSURANCE. 

" Want of space will not permit even the mere enumeration of the many 
eminent publicists, jurisconsults, and judges whose united labors and resear- 
ches have contributed for centuries to the gradual erection of the modern 
structure of Maritime Law, the foundations of which are laid on the broad 
and solid basis of natural reason and justice. It is somewhat noticeable that 
England, the leading commercial nation of the world, has never promulga- 
ted any authoritative maritime code. The Lex Mercatoria, or law merchant, 
although never enacted by Parliament, constitutes a part of the common law, 
and as compiled from the general usages and laws of all commercial nations, 
is expounded by her Admiralty and other courts of justice. 

" These mediaeval codes embodied the concentrated wisdom of those early 
days, and still constitute the foundation of the present maritime laws of ail 
civilized states, and are justly considered as forming to a considerable extent 
a portion of the jus gentium, or law of nations. 

" Before the practice of Insurance came into use, when for any reason the 
nautical loan was not resorted to by the merchants of the earlier middle ages, 
a division of freight among different vessels, as well as part ownership of 
ships, was devised as an expedient to lessen the risks from the many perils of 
the sea, which were so much more common before the discovery of the mari- 
ner's compass (a.d. 1302). 

" Marine insurance, which is the earliest kind of insurance known, un- 
doubtedly had its origin in some of the maritime cities of Europe about the 
14th century. Modern researches have discovered strong evidence of its ear- 
liest existence and practice in the opulent city of Bruges. The Chronicle 
of Flanders (a.d. 621 to 1725), published 1736, records as follows :— ' At the 
request of the inhabitants of Bruges in 1310, he (the Count of Flanders) per- 
mitted the establishment in this town of a Chamber of Insurances, by which 
the merchants were enabled to insure their merchandise, exposed to the risks 
of the sea or other hazards, for the consideration of a few pence per cent., as is 
practised to the present day. But in order that so useful an establishment to 
the merchants might not be dissolved as soon as founded, he enacted various 
laws and forms which the insurers as well as the merchants were bound to 
conform to.' 

" The rate of premium for marine insurance between London and Pisa, 
about the year 1400, appears, by the work of the Florentine merchant Uzzano, 
to have been from twelve to fifteen per cent., and the same rate from Bruges, 
in Belgium. 

" One of the first laws in Europe relating to insurance, seems to have been 
an ordinance of twenty chapters, still extant, promulgated by the magistrates 
of Barcelona, in 1435, regulating marine insurances, and this act in some of 
its provisions implies the previous existence of marine underwriting. 

" A law was promulgated upon insurances in Flanders in the year 1537. 

" In 1593, Philip II., King of Spain, made an ordinance relating to insuran- 
ces on the Exchange at Antwerp ; and the Coutoumier pour les Assurances of 
Amsterdam, consisting of thirty-six articles, was promulgated in 1598. 

" The treatise or Notes of Roccus on Insurance was first published in 1655. 
" In 1629, a scheme was projected in the United Provinces or Republic of 
Holland, during the height of the war with Spain, for a general Chamber or 
Company of Insurance for Marine risks, and the project was developed with 
almost all the completeness of the present era. It was proposed, however, to 
make the insurance compulsory, and after considerable discussion and exami- 
nation by the States General, the scheme was abandoned in consequence of 
the objections of the merchants of the maritime towns. It may be of some 
interest to the marine underwriters of the present day to reproduce some of 
the proposed rates of premium : — For the Sound and Norway, summer, 2-£- ; 
winter, 3£ per cent. For Bergen in Norway, Drontheim, and Stavanger, in 
summer, 3 per cent ; winter, 3i per cent. For Muscovy, outward bound, 3-£ ; 
homeward, 4 per cent. For Greenland and Spitzbergen, 3 per cent. For 
Hamburg, 2 per cent ; for Emden and Bremen, l-£ per cent. For Scotland, 
Newcastle, Hull, and neighborhoods, 2£ per cent. For the Thames, 2£ per 



EARLY HISTORY OF MARINE INSURANCE. 455 

cent. For Plymouth to ' La Pointe de l'Angleterre,' 3 per cent. For Ireland 
and its neighborhood, 5 per cent. For Nantes, La Rochelle, and neighbor- 
hood, 4J per cent. For Bordeaux, 5 per cent.,' etc., etc. 

"The first English statute relating to marine insurance was passed in 
1601. Special Commissioners were appointed to meet weekly 'in the office 
of the Assurances,' to hear and decide summarily all marine insurance liti- 
gation. The act was entitled, ' An act concerninge matters of Assurances 
amongste Merchentes,' the preamble to which is worth reciting as an epitome 
of the knowledge on this subject in England at this early day : — ' Whereas it 
ever hathe bene the policie of this relme by all good meanes to comforte and 
encourage the merchante, therebieto advance and increase the generall wealth 
of the relme, her majestie's customes and the strength of shippinge, which 
consideration is nowe the more requisite because trade and traffique is not at 
this presente soe open as at other tymes it hathe bene. And whereas it hathe 
bene tyme out of mynde an usage amongste merchantes, bothe of this realme 
and of -forraine nacyons, when they make any greate adventure (speciallie into 
remote partes) to give some consideration of money to other persons (which 
commonlie are in no small number) to have from them assurance made for 
their goodes, merchandizes, ships and things adventured, or some parts there- 
of, at such rates and in such sorte as the parties assurers and the parties assur- 
ed can agree, which e course of dealinge is commonlie termed a policie of as- 
surance ; by means of which policies, if it cometh to passe upon the loss or 
perishinge of any shippe, there followethe not the undoinge of any man, but 
the losse lightethe rather easilie upon many than heavilie upon fewe, and 
rather upon them that adventure not than those that doe adventure ; where- 
by all merchantes, especiallie the younger sorte, are allured to venture more 
willinglie and freelie.' (43 Eliz. cap. 12.) 

" The business of marine insurance was carried on at this date, as a trade 
or business, solely by individual underwriters who became person ally respon- 
sible for different sums in cases of loss to ship or cargo from the perils of the 
sea. 

" In 1720, the first Parliamentary committee sat to inquire into the sub- 
ject of Insurance, to investigate the practice of marine underwriting as then 
existing, and to hear certain complaints made as to several unjustifiable un- 
dertakings and projects, whereby great mischief might accrue to the public. 
It was during this year (1720) that on the petition of many merchants and 
traders and the payment of a very heavy sum (£300,000 sterling each, after- 
ward reduced one half) to the Exchequer for deficiencies in the civil list, that 
the ' Boy at Exchange Assurance for insuring Ships and Goods at Sea or going 
to Sea, and Lending Money upon Bottomry,' and the 'London Assurance for 
insuring Slaps and Goods at Sea or going to Sea, and lending Money upon 
Bottomry,'' (described in a supplemental Charter as ' The Corporation of the 
London Assurance of Houses and Goods from fire,') were incorporated with 
special and exclusive privileges as against all other corporations, which mo- 
nopoly they actually held until the recent act of 1824. These two corporations 
are the oldest marine insurance companies in the world. The restrictive act 
which limited the number of partners in a trading concern was repealed, thus 
opening the field for a numerous combination of underwriters. Other marine 
insurance companies were also chartered and organized under the Joint-Stock 
Companies Act of 1844, and the Companies Act of 1862. 

" In 1746, wager policies of marine insurance, ' interest or no interest,' were 
prohibited. (19 Geo. II. cap. 37 ; 28 Geo. III. cap. 56.) 

" ' Lloyds's Coffee House,' in Lombard Street, London, known for many 
years all over the world wherever the sea washed the shore of any civilized 
nation, was established about the middle of the last century as the head- quar- 
ters or exchange of the marine underwriters. The rooms of the private under- 
writers were subsequently changed to commodious apartments in the Royal 
Exchange. Since the act of 1824, more than five individuals can become as- - 
sosiated together in business at ' Lloyds's.' A capital of at least £5,000 sterling 
is required, however, as a necessary qualification for membership. The associ- 
ation numbers about two hundred members." 



456 MARINE INSURANCE ON CALIFORNIA COAST. 

During the Colonial government in this State (New York), and 
after the Revolution, until about the year 1800, the business of 
Insurance was mostly confined to individual Underwriters, who 
wrote risks singly, and not in solido, for the various amounts sub- 
scribed by them. 

The obvious and greater advantages of associated capital and 
corporate privileges soon drove the individual Underwriter from 
the field in this country, and he is now almost unknown, except 
as an historical personage. Insurance, however, is even yet in 
comparative infancy. It is one of those institutions required and 
developed by the increasing commerce, refinement, and progress 
of the race, and is therefore destined to become an important ele- 
ment in facilitating the advancement of mankind toward a higher 
civilization. 

STATISTICS OF DISASTERS ON THE LAKES. 

The records show that 152 lives were lost on the lakes in 1865, 
and that the total loss of property amounted to $1,885,643. No 
list of disasters for 1864 was made up. In 1863, the lives lost 
were 123, and the loss of property $1,480,434. In 1862, loss of 
life, 108; of property, $1,162, 173. The total number of vessels 
in 1865 was 1,749, tonnage, 449,925 ; in 1863 there were 1,870 ves- 
sels, with 470,034 tonnage. 

The disasters for 1865 were : — 

Loss on steam hulls $505,137 

Loss on steam cargoes 341,980 

Total loss by steam vessels $847,117 

Loss on sail hulls $613,262 

Loss on cargoes 425,264 

Total loss by sail vessels $1,038,536 

Total loss by steam and sail $1,885,643 

Loss of life by steam vessels 116 

Loss of life by sail vessels 36 

Total loss of life 152 

LOSSES AT SEA. 

The total value of American vessels lost, burned and missing 
on the ocean during the month of April, 1868, was estimated at 
$1,941,000. 

MARINE INSURANCE ON CALIFORNIA COAST. 

The amount of money paid for insurance upon this coast is 
very large, and the following, as returned to the Internal Reve- 
nue Office by the various companies, as premiums in gold coin, 
for the month of January, 1867, will be interesting: Hamburg 



BOARD OF LAKE UNDERWRITERS. 457 

and Bremen, $4,863 ; British and Foreign Marine, $1,017 ; Cali- 
fornia, $7,296; Home Mutual, $6,089; Imperial, $7,712; Mer- 
chants' Mutual Marine, $13,835; National, $14,720; Northern 
Assurance, $1,829 ; Pacific, $54,206 ; San Francisco, $3,677 ; 
Union, $21,476 ; Builders, $6,445 ; North British and Mercantile, 
$8,718; Occidental, $4,347; Firemen's Fund, $11,760 — making a 
total of premiums paid for insurance, for the month of January, 
of $167,990. Taking this return as a fair average, would make 
the amount paid as premiums for insurance per year, $2,015,880. 

OFFICIAL ENDORSEMENT. 

Great praise and credit is due to the officers of Fire, and Fire and Marine 
Insurance Companies, for the manner in which they have sustained their in- 
stitutions during the last two years, for without the utmost perseverance and 
energy their misfortunes would have overcome their receipts, capitals, and 
savings ; and in the main well-managed institutions would have passed over 
into the hands of receivers, a misfortune, pretty sure, like a fire, to leave 
nothing but ashes behind. 

There is but little to comment upon in regard to the management of In- 
surance Companies. For as a general thing their officers are able, careful, 
and faithful men. — Conn. Ins. Report 1867. 

BOARD OF LAKE UNDERWRITERS. 

The Twelfth Annual Report of the Executive Committee of 
the Board of Lake Underwriters, states that a large portion of 
disasters occurring annually happens to vessels that go ashore in 
foggy weather, which could be easily prevented from stranding 
by proper masters. It urges underwriters to make a discrimina- 
tion in favor of masters who hold certificates of qualification. It 
recommends the continuation of the Board as a necessity for Lake 
insurance. 

On the subject of tariffs, it recommends that regulating the hull 
tariff by tonnage should be abolished, and that the following 
rates be hereafter considered as the Tariff of Hull Rates on sail 
or steam-vessels in the season of navigation, from April 1st to 
November 30th : 

On Al Sail or Steam-Vessels, 8 per cent. 
On A3 " " " 8£ " 

OnBl " " " 9 

OnBS " " " 10 

To which add -£ per cent, for the winter-risk. 

The Cargo Tariff, for 1865, was a very just and fair one for all 
parties, and it recommends the adoption of it for 1866. Some of 
the committee have recommended that the cargo rate for April 
and May should be alike, and some have thought that May should 
be added to June, July, and August, all at same tariff of rates : 
but on the whole, as the cargo tariff of 1865 was drawn with 
great care by competent men, after years of experience, your 
Committee have decided to recommend its adoption for 1866, as 
the best suited for the interest of all parties. 



458 GOOD SUGGESTIONS TO MARINE COMPANIES. 

TOTAL WRECKS AND LOSS IN TWO TEARS. 

The total number of wrecks and casualties at sea in 1867 was 
12,513, against 11,711 in 1866. The total losses were 2,343, of 
which 105 were steamers, in 1867, against 2,234, of which 115 
were steamers, in 1866. The loss of life in 1867 was only 1,346, 
against 2,644 in 1866 ; but the returns on this head are imperfect. 
The month in which the fewest losses have occurred for the past 
ten years is July, the heaviest, November. Of the entire list cf 
total losses, numbering 343 last year, 20 per cent, occurred in the 
British Islands. In the British Islands the number of vessels 
raised last year, after sinking, was 32, and in the rest of the world 
only 20. There were five cases of loss from piracy in 1867, and 
18 in the year preceding. 

GENERAL AVERAGE. 

Whichever of the three great mercantile interests — ship, freight, or cargo 
■ — is voluntarily lost or damaged for the benefit of the others, if the others re- 
ceive benefit therefrom, they must contribute ratably to the loss. That is to 
say, such a loss is averaged upon all the interests and property which derive 
advantage from it. The phrase " general average " is used because a loss of 
a part is thus divided among all the other parts, and is sustained by all in 
equal proportion. This rule is ancient and universal. We have no doubt 
whatever that it would be held to apply to all our inland navigation, whether 
of river or lake, steam or canvas. 

The loss must be voluntary. Therefore, if the cargo be actually thrown 
over, and the ship saved thereby, or if the ship be actually cast ashore, and the 
goods saved thereby, yet if, in the first case, the cargo could not possibly have 
been saved, and if, in the second case, the ship could not possibly have been 
saved, there is no average. We distinguish this from the cases where all can- 
not possibly be saved, but something may be, if something else is sacrificed. 
Here there is no doubt that the thing lost by voluntary choice is to be paid 
for. This question has been much discussed, but we say that the loss must be 
voluntary ; and if the peril of any one whole and specific thing is such that 
its safety is impossible, the destruction of it in a way to insure the safety of 
the rest is not such a voluntary loss or sacrifice as would give a claim for in- 
demnity. — Hunts Magazine. 

GOOD SUGGESTIONS TO MARINE COMPANIES. 

Mr. Glaisher, of the Royal Observatory, England, has written 
a letter " On the Variations of the Reading of the Barometer and 
the Weather during the Late Gales." He asserts that if seamen 
were supplied with truthful instruments, there would be much 
less destruction of life and property than now takes place. This 
is a matter of great importance to the marine interest, and ought 
to be thoroughly investigated. 

In regard to losses by Marine Insurance Companies, it is ascer- 
tained that disasters have been sustained in part by their neglect 
to enforce rules which would provide the necessary equipments 
and a sufficient number of men to work and protect the vessels 
they insure. 

It is also very necessary to test the condition of the hulls and 
timbers of vessels to ascertain if they are sound, and to cause ma- 



NEW-YORK MARINE INSURANCE STATISTICS FOR 1868. 459 



chinery and boilers to be examined, to test their qualities. And 
it is equally necessary to know that a vessel on going to sea car- 
ries the necessary equipments and a sufficient number of the vari- 
ous kinds of hands to work and care for the ship and repair 
damages. 

NEW-YORK MARINE INSURANCE STATISTICS FOR 1868. 

[From the Annual Report of the Superintendent of the Insurance 
Department of New- York, for the year ending Dec. 31, 1S67.] 



Name of 
Company. 


Stock Capital 
and Scrip. 


Net Assets for 
Policyholders. 


Marine (cash) 
Premiums. 


Losses Paid 
(Marine.) 


New- York State Marine Companies. 


1. Atlantic 

2. Great Western 

3. Union 

4. Orient 

5. Mercantile . . . 

6. Commercial. . 

7. Pacific 

8. Sun 


$6,092,550 00 
2,005,670 00 
1,138,640 00 
632,100 00 
966,800 00 
651,810 00 
706,635 00 
500,000 00 
557,225 00 


$10,979,771 09 

2,548,394 50 

1,177 667 46 

1,126,400 61 

1,041,153 59 

961,786 90 

941,145 18 

862,865 42 

693,323 62 


$6,339,053 56 
2,033,035 96 
191,304 75 
647,540 12 
981,179 71 
290,186 22 
775,458 35 
1,218 653 69 
221,502 67 


$3,711,110 70 
1,176,699 97 
166,679 10 
332,209 39 
902,783 83 
148,839 28 
436,585 72 
1,166,416 05 
168,193 65 


9. New- York . . . 
Total 


13,251,430 00 


20,332,508 37 


12,697,915 03 


8,209,517 69 


New- York State Fire-Marine Insurance Companies. 


1. Home 

2. Phoenix 

3. Security 

4. Manhattan. . . 

5. International. 

6. Washington.. 

7. Metropolitan . 

8. Albany City.. 

Total 


$2,000,000 00 
1,000,000 00 
943,185 13 
500,000 00 
509,480 11 
608,834 00 
300,000 00 
200,000 00 


$3,516,406 23 
1,455,460 93 
1,377,050 41 
957,479 03 
901,805 92 
725,777 92 
366,369 68 
300,661 75 


$210,542 98 

825,939 31 

471,504 36 

255,377 14 

322,327 23 

10,463 25 

79,467 19 

62,508 57 


$166,681 54 

744,258 68 

350,437 70 

291,013 70 

379,296 28 

27,000 73 

95,365 60 

15,799 08 


6,061,499 24 


9,601,011 87 


2,238,130 03 


2,069,853 31 


Fire-Marine Companies of other States. 


1. Ins. Co. N. A., 
Pa 


$500,000 00 

1,000,000 00 
750,000 00 
750,000 00 

500,000 00 
500,000 00 
250,000 00 


$1,867,416 46 

1,253,751 09 

886,404 37 
830,467 46 

659,035 42 

586,284 74 
384,035 87 


$394,874 08 

202,910 16 

96,514 53 

107,032 00 

127,471 38 

125,132 65 

40,027 50 


$382,630 18 

75,903 22 

39.631 94 
69,481 51 

99,998 24 
121,523 02 

49.632 17 


i2. Pacific, Cal. . . 

3. National, Cal. 

4. Union, Cal.. . . 

5. Narragansett, 

R.I 

6. Merchants,Cal 

7. U. States, Md. 

Total 


4,250,000 00 


6,467,395 41 


1,093,962 30 


838,800 28 



The preceding Table shows the Scrip and Stock Capitals, Net 
Assets held for the protection of policy-holders, Marine and In- 
land Premiums in cash, and Losses paid, of the New- York State 



460 



STANDING OF COMPANIES. 



Marine Insurance Companies; which Table includes also the 
Marine and Inland business of the New-York State Joint-Stock 
Fire Insurance Companies engaged in Marine Underwriting, and 
also the Fire-Marine Companies of other States, authorized to 
transact Marine business in this State. 

The premiums and losses on the Inland business of Fire Insur- 
ance Companies of this and other States, are not included in the 
above Table, when such Companies do not write Marine (Ocean) 
Risks ; when these Risks are written, inland risks are included 
as a part of their Marine business. 

The Mercantile Mutual Insurance Co.'s net Assets, held for the 
protection of policy-holders, are now increased by $300,000, being 
the amount of the security notes subscribed in February last. 

TABLE, 

Showing the relative standing of the Marine and Fire-Marine Insurance 
Companies transacting business in this State on the basis of the least per cent- 
age of Marine Losses paid to net Cash Marine Premiums received for the 
year ending December 31, 1867. 



No. 



Name of Company. 



Orient Mutual Insurance Company 

Commercial Mutual Insurance Company. 

Pacific Mutual Insurance Company 

Great Western Insurance Company 

Atlantic Mutual Insurance Company. . . . 
New- York Mutual Insurance Company. . 
Mercantile Mutual Insurance Company. . 

Sun Mutual Insurance Company 

Union Mutual Insurance Company. ..... 



Average (companies combined) 

New- York State Fire-Marine Insurance Com- 
panies. 

Albany City Insurance Company 

Security Insurance Company 

Home Insurance Company 

Phoenix Insurance Company 

Manhattan Insurance Company 

International Insurance Company 

Metropolitan Insurance Company 

Washington Insurance Company 



Average (companies combined). 



Marine and Fire-Marine Companies of other 
States. 

Pacific Insurance Company , 

National Insurance Company 

Union Insurance Company 

Narragansett Fire and Marine Insurance Co . 

Insurance Company of North America , 

Merchants' Mutual Marine Insurance Co. 
United States Fire and Marine Insurance Co. 

Average (companies combined) 



Location. 



New- 
New- 
New- 
New- 
New- 
New- 
New- 
New- 
New- 



York 
York 
York 
York 
York 
York 
York 
York 
York 



Albany . . . 
New- York 
New-York 
New-York 
New-York 
New-York 
New- York 
New-York 



San Francisco, Cal. 
San Francisco, Cal. 
San Francisco, Cal. 
Providence, R. I. . . 
Philadelphia, Pa. . 
San Francisco, Cal. 
Baltimore, Md. . . . 



Per- 
centage, 



51-30 

51-84 
56-30 
57-88 
58-54 
75-93 
92-01 
95-71 
104-59 



64-83 



25-27 

74-32 

79-17 

90-11 

113-95 

117-67 

120-00 

258-06 



92-48 



36-68 
41-06 
64-92 
78-45 
96-90 
97-11 
124-00 



77-37 



STANDING OF COMPANIES. 



461 



The average per centage of Losses to cash Premiums of the 
New-York State Marine Insurance Companies has been as follows 
for the last three years : 

Year. Percentage. 

1865 71 * 64 

1866 83-13 

1867 64*83 

The Losses of the Washington, paid and unpaid, during the 
year 1867 are not included. 

TABLE, 

Showing the relative standing of the Marine and Fire-Marine Insurance Com- 
panies transacting business in this State on the basis of the largest per centage 
of net Assets to each $100 of the amount of all Bisks in force on the 31st day 
of December, 1867. 



No. 



Name of Company. 



New- York Mutual Insurance Company. . 

Pacific Mutual Insurance Company 

Commercial Mutual Insurance Company. 
Atlantic Mutual Insurance Company. . . . 

Union Mutual Insurance Company 

Great Western Insurance Company 

Orient Mutual Insurance Company 

Sun Mutual Insurance Company 

Mercantile Mutual Insurance Company. . 



Average (companies combined) 

New -York State Fire-Marine Insurance Com- 
panies. 

Washington Insurance Company 

Phoenix Insurance Company 

Manhattan Insurance Company 

Albany City Insurance Company 

Home Insurance Company 

Metropolitan Insurance Company 

Security Insurance Company 

International Insurance Company 



Average (companies combined) 

Marine and Fire-Marine Companies of other 



National Insurance Company 

Union Insurance Company 

Pacific Insurance Company 

Merchants' Mutual Marine Insurance Co. . . . 
United States Fire and Marine Insurance Co. 

Insurance Company of North- America 

Narragansett Fire and Marine Insurance Co. 



Average (companies combined) . 



Location. 



New- York 
New- York 
New- York 
New- York 
New- York 
New- York 
New- York 
New- York 
New-York 



New- York 
New- York 
New- York 
Albany. . . 
New- York 
New- York 
New- York 
New- York 



San Francisco, Cal. 
San Francisco, Cal. 
San Francisco, Cal. 
San Francisco, Cal. 

Baltimore, Md 

Philadelphia, Pa . . 
Providence, R. I. . . 



19-514 
16-537 

12-811 
12-405 
11-8 

11-669 
7-950 

5-478 
3 924 



10-507 



3-132 

2-003 
1-967 
1-888 
1-853 
1-756 
1-541 
1-499 



1-844 



10 940 



162 
822 
691 
793 
325 
199 



4-832 



Where a Company writes hull risks, a large per centage of Assets 
is of course necessary, in order to bear the increased hazard. 



CHAPTER II. 
FIEE INSURANCE. 

ITS SCIENTIFIC BASIS. 

Underlying all insurance is the theory of probabilities. This 
theory applies to Fire Insurance, and forms its basis. It goes on 
the simple presunrption that what has happened, may, and most 
likely will, happen again, under similar circumstances ; and the 
result has fully demonstrated by experience the soundness of the 
principle. Alluding to fire records kept in London, Mr. J. II. 
James says, "They have departed but very slightly from the 
result estimated by the theory of probabilities." 

Hon. Elizur Wright says that Fire and Marine Insurance Com- 
panies, like those for insurance on life, are founded on the mathe- 
matical doctrine of chance, or what is sometimes called the law 
of average. By this law, however incalculable any particular 
event may be, the aggregate of the whole number of such events, 
when they occur in large numbers, and no general cause inter- 
feres to control them, will be very nearly the same in equal times. 
If you own a ship or a house, nothing can well be more uncertain 
in itself than whether one will be wrecked or the other burned in 
the next year. But of all the ships and houses owned in Massa- 
chusetts, nothing can well be more certain than that the loss 
by water and fire next year will not exceed ten per cent, of its 
value. 

This writer proceeds very justly to remark that the prosperity 
of all Fire Insurance Companies depends very much on a know- 
ledge of what is this average value of the risk of each species or 
class of property, and that this can only be approximated by the 
widest and most careful statistical inquiry. He laments that no 
such inquiry has ever been instituted in any country, to his 
knowledge, as in this country it is certain it has not been. Our 
countrymen, it is remarked, have gone into the business with no 
better lights than the experience of Companies in other countries, 
and a sort of dim instinct teaching them that a carpenter's shop 
or a livery stable, exposed to ignited cigar-stumps and other 
incendiary missiles, must be several times more hazardous than 
a well-kept dwelling-house. Working at first by mere presump- 
tion instead of the results of statistical inquiry, some Companies 
amassed enormous profits, while others left themselves beacons — 
wrecks to warn succeeding Companies against the low rates that 
ruined them, supposing they were not ruined by high expenses. 
This high-priced experience of former insurance is, of course, 
of some value, just as it is ? but of very little value compared 



OFFICIAL HISTORY OF NEW-YORK FIRE COMPANIES. 463 

with what it would have been if every Company had carefully 
classified its risk, and ascertained exactly what was the ratio of 
loss for the year to the amount insured through the year in each 
class." — Mass. Reports, 1862. 

EARLY STRUGGLES OF FIRE INSURANCE. 

Though Fire Insurance received some attention at the hands of 
the Saxon guilds — ("If any member suffer from fire, water, or 
robbery, or other calamity, the guild is to lend him a sum of 
money without interest") — it was not till 1609 (Count Anthony 
Gunter) that the principle of yearly premiums was proposed for 
full indemnification. The first company did not go into operation 
in England till 1696. For a long time previous to this, insurance 
against fire was looked upon as a presumptuous scheme, tempting 
Providence and injurious to the insurer. 

OFFICIAL HISTORY OF NEW-YORK FIRE COMPANIES. 

We here introduce an epitome, arranged in chronological order, 
of the date of incorporation and of all amendatory Acts of one 
hundred and five existing joint-stock Fire Insurance Companies, 
which was published in the New- York State Reports for 1866. 
It was compiled by Hon. George Wolford, Deputy Superin- 
tendent, and is as follows : — 

1787. 

(1.) Knickerbocker Fire Insurance Company, of New- York. —Originally organized accord- 
ing to the English custom under a deed of settlement dated April 3, 1787, under the title of 
the Mutual Insurance Company of the city of New- York. 

Incorporated March 23, 1798 (chap. 46, p. 3-18), as the Mutual Assurance Company of the 
city of New- York, and reorganized by Act of March 28, 1809 (chap. 149, p. 154), with a capital 
stock of $500,000, its duration being fixed at fifteen years. 

By Act of April 12, 1816 (chap. 121, p. 120), the corporation was continued until limited by 
Act of the Legislature, etc. 

By Act of April 8, 1836 (chap. 100, p. 141), the capital stock was reduced to $350,000. 

By Act of April 30, 1836 (chap. 223, p. 291), the Company was authorized to purchase and 
hold real estate. 

By Act of May 12, 1846 (chap. 221 , p. 289), the corporate name of the Company was changed to 
its present name, and its capital stock was reduced to $230,000, and the provisions of sections 
eleven, thirteen, and fourteen of the Act of February 12, 1836 (chap. 24, p. 26), were made to 
apply to it. 

1306. 

(2.) Eagle Fire Company, of New- York. —Incorporated by an Act of the Legislature, 
passed April 4, 1806 (chap. 152, p. 490), with a capital stock of $500,000. 

By an Act of the Legislature, passed March 23, 1811 (chap. 70, p. 127), the Company was 
authorized to make insurance upon lives and to grant annuities. 

By an Act of the Legislature, passed March 24, 1815 (chap. 99, p. 98), the Company was 
authorized to execute policies without affixing its corporate seal. 

By an Act of the Legislature, passed April 13, 1836 (chap. 133, p. 176), the Company was 
authorized to purchase real estate to the extent of $70,000. 

By Act of the Legislature, passed May 12, 1846 (chap. 225, p. 295), the Company was au- 
thorized to repair its capital stock, and the Act of February 12, 1836 (chap. 24, p. 26), was 
made to apply to it. 

1811. 

(3.) Albany Insurance Company, of Albany.— Incorporated by an Act of the Legislature, 
passed March 8, 1811 (chap. 40, p. 54) ; its duration was fixed at twenty years, and its capital 
stock at $500,000. 

Its charter was extended to June 1, 1851, and its capital stock reduced to $300,000 by an 
Act of the Legislature, passed April 15, 1828 (chap. 220, p. 269). 

Its charter was amended and extended for thirty years and its capital fixed at $100,000 
March 4, 1851, under the Act of April 10, 1849. Its capital stock was subsequently increased 
to $150,000. 



464 OFFICIAL HISTORY OF NEW-YORK FIRE COMPANIES. 



1821. 

(4.) Manhattan Insurance Company, of New-York.— Incorporated March 23, 1821 (chap. 
141, p. 130), under the title of the Manhattan Fire Insurance Company, with a capital stock 
of $350,000. 

Its chartei was extended thirty years under the Act of February 12, 1836 (chap. 24, p. 26). 

By the Aci f May 12, 1846 (chap. 225, p. 294), the Company was authorized to repair its 
capital stock. 

By the Act of April 15, 1847 (chap. 66, p. 72), section one of the last preceding act was 
amended. 

Its charter was amended and extended and capital stock increased to $500,000, July 22, 
1864, under the Act of June 25, 1853. 

By the Act of April 8, 1865 (chap 327, p. 545), the name of the Company was changed to its 
present title, and it was authorized to do both Fire and Marine business, etc. 

1822. 

(5.) North River Insurance Company, of New- York.— Incorporated by Act of February 6, 
1822 (chap. 23, p. 16), with a capital stock of $350,000. 

By the Act of April 13, 1835 (chap. 76, p. 63), its charter was amended and extended to 
January 1, 1852, etc. 

Its charter was again amended and extended thirty years, July 25, 1851, under the Act of 
April 10, 1849. 

1823. 

(6.) North American Fire Insurance Company, of New- York. — Incorporated by Act of 
March 29, 1823 (chap. 95, p. Ill), as the Phoenix Fire Insurance Company, with a capital stock 
of $250,000. 

By the Act of March 15, 1832 (chap. 37, p. 69), it was authorized to reduce its capital stock 
to $200,000. 

By the Act of April 8, 1836 (chap. 99, p. 140), the capital stock of the Company was increased 
to $250,000. Its title was changed to the present name, and it was authorized to exercise 
the powers and enjoy the advantages conferred by the Act of February 12, 1836 (chap. 24, 
p. 26). 

By the Act of May 7, 1845 (chap. 139, p. 125), the Company was authorized to insure against 
inland navigation and transportation risks. 

By the Act of May 12, 1846 (chap. 210, p. 255), it was authorized to make calls upon its 
stockholders for capital impaired by the fire of July, 1845. 

By the Act of April 12, 1852 (chap. 220, p. 297), it was authorized to make loans on certain 
securities. 

Its charter was amended and capital stock increased to $500,000, October 6, 1863, under the 
Act of June 25, 1853. 

Its charter was amended and extended thirty years, January 2, 1866, under the Act of 
June 25, 1853. 

(7.) New- York Equitable Insurance Company, of New-York.— Incorporated by Act of April 
23, 1823 (chap. 234, p. 287), with a capital stock of $300,000. 

By Act of January 23, 1827 (chap. 16, p. 11), that part of section seven which related to the 
location of its office was repealed. 

Under the Act of February 12, 1836 (chap. 24, p. 26), its charter was extended thirty years. 

Its charter was amended and extended thirty years, October 30, 1865, under the Act of 
June 25, 1853. 

1824. 

(8.) Jefferson Insurance Company, of New-York.— Incorporated by Act of the Legislature, 
March 4, 1824 (chap. 75, p. 65), with a capital stock of $250,000. 

Its capital stock was reduced and authorized to be repaired by Act of the Legislature, 
passed April 19, 1828 (chap. 272, p. 342). 

By chap. 278 (p. 401) of the Laws of 1833 (April 29) the capital stock of the Company was 
increased to $200,000. 

Its charter was extended thirty years under the Act of the Legislature, February 12, 1836 
(chap. 24, p. 26). 

By Act of the Legislature passed May 12, 1846 (chap. 224, p. 293), the Company was author- 
ized to repair its capital stock. 

Its charter was amended and extended thirty years, November 1, 1865, under the Act of 
June 25, 1853. 

(9.) iEtna Insurance Company, of New- York.— Incorporated by Act of March 31, 1824 
(chap. 135, p. 125), under the title of the JEtna Fire Insurance Company, with a capital stock 
of $400,000, and authorized to commence business on a paid-up capital of $200,000. 

Its charter was amended and extended for thirty years, and its new capital stock was fixed 
at $200,000, under the Act of February 12, 1836 (chap. 24, p. 26). 

It was authorized to insure against risks of inland navigation and transportation by Act of 
March 28, 1862 (chap. 67, p. 212). 

Its charter was amended and extended for thirty years, its title changed to the present 
name, and the amount of capital stock with which it was authorized to do business fixed at 
$300,000, on the 12th day of February, 1866, under the Act of June 25, 1853. 

By the Act of April 14, 1866 (chap. 619), the Company was authorized to do both fire and 
coastwise marine business on the increase of its capital stock to $500,000. 



OFFICIAL HISTORY OF NEW-YORK FIRE COMPANIES. 465 

(10.) United States Fire Insurance Company, of New-York.— Incorporated by Act of March 
31, 1824 (chap. 134, p. 120), with a capital stock of $250,000. 

Under the Act of February 12, 1836 (chap 24, p. 26), its charter was extended thirty years. 

By the Act of May 12, 1S46 (chap. 261, p. 338), it was authorized to make calls on the stock- 
holders and repair its capital stock, etc. 

Its charter was amended and extended thirty years, February 10, 1S66, under the Act of 
June 25, 1S53. 

(11.) Brooklyn Fire Insurance Company, of Brooklyn.— Incorporated by an Act of the 
Legislature, passed April 3. 1824 (chap. 166, p. 175), with a capital stock of $150,000. The 
duration of the Company was fixed at twenty-one years. 

By an Act of the Legislature, passed April 14, 1S29 (chap. 131, p. 228), the Company was 
authorized to reduce its capital stock to $102,000. 

By an Act of the Legislature, passed April 8, 1844 (chap. 133, p. 123), its charter was extended 
twenty-one years from April 3, 1S45. 

By an Act of the Legislature, passed April 14, 1859 (chap. 309, p. 696). the Company was au- 
thorized to increase its capital stock to $153,000. 

Its charter was amended and extended for thirty years, and its capital stock continued at 
$153,000, February 26, 1866, under the Act of June 25, 1S53. 

1825. 

(12.) Howard Insurance Company, of New- York.— Incorporated March 9, 1825 (chap. 27. 
p. 23), with a capital stock of $300,000. 

By chap. 219 (p. 2S6), Laws of 1846, this Company was authorized to repair its capital stock, 
and the provisions of the eleventh, thirteenth, and fourteenth sections of the Act of February 
12, 1S36 (chap. 24, p. 26) were made to apply to it. 

Its charter was amended and extended thirty years, and its capital stock fixed at $300,000, 
October 25, 1S64, under the Act of June 25, 1853. 

By the Act of April 7, 1866 (chap. 431), the Company was authorized to do both Fire and 
Marine business on the increase of its capital stock to $500,000. 

(13.) Firemen's Insurance Company, of New- York.— Incorporated by Act of the Legislature, 
April IS, 1S25 (chap. 213, p. 322), with a capital stock of $300,000. 

Its charter was extended thirty years under the Act of the Legislature of February 12, 
1836 (chap. 24, p. 26). 

By Act of the Legislature, passed April 12, 1842 (chap. 228, p. 2S2), the Company was au- 
thorized to make investment of its capital and surplus profits in certain securities, &c. 

By Act of the Legislature of May 12, 1846 (chap. 222, p. 290), its capital stock was reduced 
to $204,000, and the Company was authorized to repair the same. 

The last preceding Act was amended April 19, 1847 (chap. 92, p. 96). 

Its charter was amended and extended thirty years, February 10, 1866, under the Act of 
June 25, 1853. 

1832. 

(14.) New- York Fire Insurance Company, of New- York.— Incorporated April 18, 1832 (chap. 
175, p. 292), with a capital stock of $200,000. 

Its charter was amended and extended thirty years under the Act of February 12, 1836 
(chap. 24, p. 26). 

By the Act of March 22, 1838 (chap. 93, p. 63), the tenth section of the Act of Incorporation 
was repealed, and the number of directors to constitute a quorum was fixed at nine. 

By the Act of May 12, 1846 (chap. 21S, p. 2S6), it was authorized to make insurance upon 
risks of transportation and inland navigation and the coasting trade of the United States. 

By the Act of May 10, 1S47 (chap 250, p. 274), its name was changed to that of the New- 
York Fire and Marine Insurance Company, and its marine powers were enlarged. 

Its charter was amended and extended thirty years, July 1, 1865, and its name changed to 
the present name under the act of June 25, 1853. 

, (15.) North-Western Insurance Company, of Oswego.— Incorporated by Act of April 26, 
18*^2 (chap. 31S, p. 547), with a capital stock of $150,000. 

By Act of April 6, 1833 (chap. 117, p. 135), parts of the fourth and fifth sections of the Act 
of Incorporation were repealed. 

By the Act of April 5, 1856 (chap. 100, p. 150), its charter was extended twenty years. 

1833. 

(16.) New- York Bowery Fire Insurance Company, of New- York.— Incorporated by the 
Act of April 24, 1833 (chap. 218, p. 296), with a capital stock of $300,000. 

Its charter was amended and extended thirty years, February 4, 1883, under the Act of 
June 25, 1853. 

(17.) City Fire Insurance Company of New-York.— Incorporated by an Act of the Legisla- 
ture, passed April 26, 1833 (chap. 244, p. 344), with a capital stock of $300,000. 

By an Act of the Legislature, passed March 23, 1838, (chap. 105, p. 71), its charter was 
amended and capital stock reduced to $210,000. 

Its charter was amended and extended for thirty years, January 27, 1863, under the Act of 
June 25, 1853. 

By an Act of the Legislature, April 14, 1865, (chap. 423, p. 779), the Company was autho- 
rized to increase its capital stock to not exceeding $1,000,000, &c. 

(18.) Long Island Insurance Company, of Brooklyn. — Incorporated by Act of April 26, 
1833 (chap. 241, p. 335), with a capital stock of $200,000. 

By the Act of April 26, 1835 (chap. 74, p. 62), the number of directors to constitute a quo- 
rum was fixed at eight. 



466 OFFICIAL HISTOEY OF NEW- YORK FIRE COMPANIES. 

By Act of April 13, 1837 (chap. 198, p. 191), the Company was authorized to appoint inspec- 
tors of election, &c. 

By the Act of May 14, 1840 (chap. 349, p. 294), the Company was authorized to make tem- 
porary loans. 

Its charter was amended and extended thirty years, April 27, 1863, under the Act of June 
25, 1853. 

1834. 

(19.) Greenwich Insurance Company, of New- York. —Incorporated by Act of the Legisla- 
ture, May 5, 1834 (chap. 285, p. 513), with a capital stock of $200,000. 

Its charter was amended by Act of April 29, 1863 (chap. 312, p. 538), and the Company was 
authorized to insure against inland navigation risks. 

Its charter was amended and extended thirty years, May 3, 1864, under the Act of June 
25, 1853. 

1836. 

(20.) Citizens' Fire Insurance Company, of Brooklyn.— Incorporated as the Williamsburgh 
Fire Insurance Company by an Act of the Legislature, passed April 28, 1836 (chap. 204, p. 271), 
with a capital stock of $150,000. 

By an Act of the Legislature, passed April 17, 1843 (chap. 155, p. 198), its capital stock was 
reduced to $105,000, &c. 

By an Act of the Legislature, passed November 16, 1847 (chap. 374, p. 479), the Company 
was authorized to repair its capital stock, and sections eleven, thirteen, and fourteen of the 
Act of February 12, 1836 (chap. 24, p. 26), were made to apply to it. 

By an Act of the Legislature, passed April 5, 1849 (chap. 212, p. 326), the corporate name of 
the Company was changed to that of the Citizens' Fire Insurance Company, &c. 

By an Act of the Legislature, passed March 29, 1850 (chap. 118, p. 179), the Company was 
authorized to increase its capital stock to $150,000. 

By an act of the Legislature, passed April 15, 1858 (chap. 223, p. 358), the Company was au- 
thorized to increase its capital stock to $300,000, and its capital stock was subsequently so 
increased. 

By an Act of the Legislature passed April 30, 1864 (chap. 424, p. 1,008), the Company was 
authorized to increase its capital stock to $2,500,000, and to make insurance upon inland na- 
vigation risks, &c. 

On the 30th day of January, 1866, an amended Charter was filed in the Insurance Depart- 
ment for the purpose of extending its charter for thirty years under the general Fire Insu- 
rance Act of 1853 (chap. 466, Laws of 1853.) 

1838. 

(21.) National Fire Insurance Company of New- York. — Incorporated by the Act of April 
9, 1838 (chap. 180, p. 147), as the Seventeenth Ward Fire Insurance Company, with a capital 
stock of $200,000. 

By the Act of May 24, 1841 (chap. 216, p. 196), the title of the Company was changed to the 
present name. 

By the Act of April 12, 1842 (chap. 259, p. 321), its capital stock was reduced to $150,000. 

By the Act of May 12, 1846 (chap. 265, p. 341), its charter was amended and it was autho- 
rized to repair its capital stock, and sections eleven, thirteen, and fourteen of the Act of Feb- 
ruary 12, 1836 (chap. 24, p. 26), were made to apply to it. 

By Act of March 7, 1850 (chap. 46, p. 50), real estate was directed to be sold within five 
years, &c. 

Its charter was amended and capital stock increased to $200,000, March 3, 1857, under the 
Act of June 25, 1853. 

Under and by virtue of the provisions of Article VIII. of the Constitution of 
1846, the creation of corporations by special Act of the Legislature was prohi- 
bited sub modo, and on the 10th day of April, 1849, in obedience to the Con- 
stitution, the Legislature passed a general Act to provide for the incorporation 
of Insurance Companies. 

1849. 

(22.) Broadway Insurance Company, of New- York.— Organized December 17, 1849, under 
the Act of April 10, 1849, with a capital stock of $200,000. 

1850. 

(23.) Grocers' Fire Insurance Company, of New-York. — Organized February 15, 1850, un- 
der the Act of April 10, 1849, with a capital stock of $200,000. 

(24.) Merchants' Insurance Company, of New- York. — Organized April 20, 1850, under the 
Act of April 10, 1849, with a capital stock of $200,000. 

(25.) Glens Falls Insurance Company, of Glens Falls.— Organized May 4, 1850, under the 
Act of April 10, 1849, as a mutual Fire insurance company, under the name of the Dividend 
Mutual Insurance Company. 

Its charter was amended and name changed to present name, &c, by Act of the Legisla- 
ture, April 9, 1864 (chap. 155 : p. 331). 

Its charter was amended, its capital stock fixed at $100,000, and it was changed to a joint- 
stock company, April 30, 1864, under the Act of June 25, 1853. 



OFFICIAL HISTORY OF NEW- YORK FIRE COMPANIES. 467 

(26.) Commercial Fire Insurance Company, of New- York.— Organized May 14, 1850, under 
the Act of April 10, 1849, with a capital stock of $200,000. 

(27.) Clinton Fire Insurance Company, of New- York. —Organized July 9, 1850, under th<» 
Act of April 10, 1849, with a capital stock of $250,000. 

(28.) Niagara Fire Insurance Company, of New-York. — Organized July 31, 1S50, under the 
Act of April 10, 1849, with a capital stock of $200,000. 

Its charter was amended and capital stock increased to $500,000, March 23, 1864, under the 
Act of June 25, 1853. 

Its charter was again amended and capital stock increased to $1,000,000, December 22, 
1S64, under the Act of June 25, 1853. 

(29.) Empire City Fire Insurance Company, of New- York. — Organized October 3, 1850, un- 
der the Act of April 10, 1849, with a capital stock of $200,000. 

(30.) Washington Insurance Company, of New-York. — Organized December 14, 1850, under 
the Act of April 10, 1849, with a capital stock of $200,000. 

Its charter was amended and its capital stock increased to $400,000, January 31, 1860, un- 
der the Act of June 25, 1853. 

By the Act of April 10, 1860 (chap. 252, p. 414), it was authorized to make insurance upon 
inland navigation risks, &c. 

By the Act of March 8, 1865 (chap. 91, p.162), it was authorized to increase its capital stock 
to $1,000,000. 

1851. 

(31.) Stuyvesant Insurance Company, of New-York.— Organized January 28, 1851, under 
the Act of April 10, 1849, with a capital stock of $200,000. 

(32.) Atlantic Fire Insurance Company, of Brooklvn.— Organized February 20, 1851, under 
the Act of April 10, 1849, with a capital stock of $150,000. 

The fourth, fifth, and sixth articles of the charter were amended by an Act of the Legisla- 
ture, passed April 17, 1862 (chap. 316, p. 524). 

Its charter was amended and capital stock increased to $300,000, March 18, 1864, under the 
Act of June 25, 1853. 

(33.) People's Fire Insurance Company, of New- York.— Organized April 22,1851, under the 
Act of April 10, 1849, with a capital stock of $150,000. 

(34.) Pacific Fire Insurance Company, of New- York. — Organized April 29, 1851, under the 
Act of April 10, 1849, with a capital stock of $200,000. 

(35.) Astor Fire Insurance Company, of New- York. — Organized July 15, 1851, under the 
Act of April 10, 1849, with a capital stock of $150,000. 

Its charter was amended and capital stock increased to $250,000, August 23, 1864, under 
the Act of June 25, 1853. 

1852. 

(36.) Mercantile Fire Insurance Company, of New- York. — Organized January 15, 1852, un- 
der the Act of April 10, 1849, with a capital stock of $200,000. 

(37.) Irving Fire Insurance Company, of New- York. —Organized January 30, 1852, under 
the Act of April 10, 1849, with a capital stock of $200,000. 

By chap. 133 of the Laws of 1859 (p. 342), the Company was authorized to reduce the num- 
ber of its directors to twenty-five. 

(38.) Lorillard Fire Insurance Company, of New-York. — Organized February 3, 1852, un- 
der the Act of April 10, 1849, with a capital stock of $200,000. 

By the Act of April 10, 1860 (chap. 243, p. 403), the Company was authorized to insure on 
inland navigation risks, &c. 

Its charter was amended and capital stock increased to $500,000, July 24, 1860, under the 
Act of June 25, 1853. 

By the Act of May 10, 1865 (chap. 687, p. 1396), authority was given to increase its capital 
stock to $3,000,000, &c. 

Its charter was amended and capital stock increased to $1,000,000, September 7, 1865, un- 
der the Act of June 25, 1853. 

(39.) Nassau Fire Insurance Company, of Brooklyn. — Organized February 3, 1852, under 
the Act of April 10, 1849, with a capital stock of $150,000. 

(40.) Republic Fire Insurance Company, of New- York.— Organized April 12, 1852, under 
the Act of April 10, 1849, with a capital stock of $150,000. 

By the Act of April 14, 1857 (chap. 422, p. 843, vol. I.), it was authorized to declare cash 
dividends. &c. 

By the Act of March 8, 1862 (chap. 27, p. 90), it was authorized to apply its surplus to the 
redemption of certificates, &c. 

By the Act of March 21, 1863 (chap. 62, p. 86), sections five and ten of the charter were 
amended. 

Its charter was amended and capital stock increased to $300,000, August 3, 1863, under the 
Act of June 25, 1853. 

By the Act of. March 18, 1865 (chap. 151, p. 266), it was authorized to do both Fire and Ma- 
rine business, and sections nine, ten, twelve, and fourteen of the charter were amended. 

(41.) Hanover Fire Insurance Company, of New York.— Organized April 15, 1852, under the 
Act of April 10, 1849, with a capital stock of $150,000. 

Its charter was amended and capital stock increased to $200,000, January 17, 1857, under the 
Act of June 25, 1853. 

Its charter was again amended and capital stock increased to $400,000, July 8, 1863, under 
the Act of June 25, 1853. 

(42.) Hamilton Fire Insurance Company, of New York.— Organized May 22, 1852, under the 
Act of April 10, 1849, as the Building Association's Fire Insurance Company, with a capital 
stock of $150,000. 



468 OFFICIAL HISTORY OF NEW YORK FIRE COMPANIES. 

By Act of the Legislature, March 8, 1853 (chap. 26, p. 34,) the corporate name of the com- 
pany was changed to its present name. 

(43.) St. Nicholas Insurance Company, of New- York. Organized July 31, 1852, under the 
Act of April 10, 1849, with a capital stock of $150,000. 

1853. 

(44.) Continental Insurance Company of New- York.— Organized January 6, 1853. under the 
Act of April 10, 1849, with a capital stock of $500,000. 

(45.) Corn Exchange Insurance Company, of New- York.— Organized February 6. 1853, 
under the Act of April 10, 1849, as the Corn Exchange and Fire and Inland Navigation Insur- 
ance Company, with a capital stock of $200,000. 

By an Act of the Legislature, passed May 5, 1863, (chap. 436, p. 751), its corporate name 
was changed to its present name, and the company was authorized to increase its capital 
stock to $1,000,000. 

Its charter was amended and capital stock increased to $400,000, June 5, 1863, under the 
Act of June 25, 1853. 

(46.) Market Fire Insurance Company, of New York.— Organized February 14, 1853, under 
the Act of April 10, 1849, with a capital stock of $200,000. 

(47.) Agricultural Insurance Company, of Watertown.— Organized as a Mutual Fire In- 
surance Company, February 17, 1853, under the Act of April 10, 1849. 

Its charter was amended and place of business changed from Le Ray to Watertown, by an 
Act of the Legislature, passed April 10, 1855 (chap. 275, p. 457). 

The last preceding Act was amended by an Act of the Legislature, passed April 17, 1 860 
(chap. 476, p. 953). 

Its charter was amended and the company changed to a Joint Stock Company, and its 
capital stock fixed at $50,000, January 10, 1863, under the Act of June 25, 1853. 

The sixth article of its charter, relating to the subject of the election of directors, was 
amended by an Act of the Legislature, passed April 27, 1865 (chap. 576, p. 1176). 

Its charter was amended and capital stock increased to $100,000, December 14, 1865, under 
the Act of June 25, 1853. 

(48.) Williamsburgh City Fire Insurance Company, of Brooklyn.— Organized March 22, 
1853, under the Act of April 10, 1849, with a capital stock of $150,000. 

(49.) Fulton Fire Insurance Company, of New- York.— Organized March 23, 1853, under 
the Act of April 10, 1849, Avith a capital stock of $150,000. 

By Act of the Legislature, April 13, 1855 (chap. 409, p. 764), the company was authorized to 
change its location. 

By Act of the Legislature, April 17, 1857 (chap. 766, p. 658, vol. 2), the fifth section of its 
charter relating to the board of directors was amended. 

Its charter was amended and capital stock increased to $200,000, August 3, 1859, under the 
Act of June 25, 1853. 

(50.) Columbia Fire Insurance Company, of New- York.— Organized March 24, 1853, under 
the Act of April 10, 1849, with a capital stock of $200,000. 

Its charter was amended and capital stock increased to $500,000, January 15, 1864, under 
the Act of June 25, 1853. 

(51.) Park Fire Insurance Company, of New- York. — Organized March 30, 1853, under the 
Act of April 10, 1849, with a capital stock of $200,000. 

(52.) Peter Cooper Fire Insurance Company, of New- York.— Organized April 7, 1853, 
under the Act of April 10, 1849, with a capital stock of $150,000. 

(53.) Home Insurance Company of New- York. —Organized April 13, 1853, under the Act of 
April 10, 1849, with a capital stock of $500,000. 

Its charter was amended and capital stock increased to $600,000, July 15, 1858, under the 
Act of June 25, 1853. 

Its charter was amended and capital stock increased to $1,000,000, February 19, 1859, un- 
der the Act of June 25, 1853. 

Its charter was again amended and capital stock increased to $2,000,000, December 31, 
1863, under the Act of June 25, 1853. 

Its charter was amended and the company authorized to do Fire and Marine business by 
Act of the Legislature, April 13, 1864 (chap 175, p. 358). 

(54.) New Amsterdam Fire Insurance Company, of New-York.— Organized April 13, 1853, 
under the Act of April 10, 1849, with a capital stock of $200,000. 

Its charter was amended and capital stock increased to $300,000, April 7, 1864, under the 
Act of June 25, 1853. 

(55.) Mechanics and Traders Fire Insurance Company, of New- York.— Organized April 
18, 1853, under the Act of April 10, 1849, with a capital stock of $200,000. 

(56.) Lenox Fire Insurance Company, of New- York.— Organized April 25, 1853, under the 
Act of April 10, 1S49, with a capital stock of $150,000. 

(57.) Exchange Fire Insurance Company, of New- York. — Organized May 14, 1853, under 
the Act of April 10, 1849, with a capital stock of $150,000. 

(58.) St. Mark's Fire Insurance Company, of New- York.— Organized July 14, 1853, under 
the Act of April 10, 1849, with a capital stock of $150,000. 

(59.) Arctic Fire Insurance Company, of New- York.— Organized July 28, 1853, under the 
Act of April 10, 1849, with a capital stock of $250,000. 

Its charter was amended and its capital stock increased to $500,000, December 31, 1863, un- 
der the Act of June 25, 1853. 

(69.) Commonwealth Fire Insurance Company, of New-York.— Organized September 5, 
1853, under the Act of April 10, 1849, with a capital stock of $250,000. 

(61.) Beekman Fire Insurance Company, of New-York.— Organized September 7, 1853, 
under the Act of April 10, 1849, with a capital stock of $200,000. 

By an Act parsed June 25, 1853 (chap. 466), the general Act of 1849, so far 



OFFICIAL HISTORY" OF NEW-YORK FIRE COMPANIES. 469 

as it related to the organization of Fire and Inland Insurance Companies, was 
repealed (excepting charters already filed), and the present Act providing for 
and reo-ulating the incorporation of Fire Insurance Companies was passed. 

(62.) Phoenix Insurance Company, of Brooklyn.— Organized September 10, 1853, under the 
Act of June 25, 1853, as the Phoenix Fire Insurance Company, with a capital stock of $200,000. 

Its charter was amended, and capital stock increased to $500,000, June 27, 1864, under the 
Act of June 25, 1853. 

By the Act of April 18, 1864 (chap. 227, p. 480), it was authorized to increase its capital 

Its charter was amended and capital stock increased to $1,000,000, November 22, 1865, un- 
der the Act of June 25, 1853. 

By the Act of February 19, 1866 (chap. 62), its title was changed to its present name. 

(63.) Rutgers Fire Insurance Company, of New-York.— Organized October 1, 1853, un- 
der the Act of June 25, 1853, with a capital stock of $200,000. 

(64.) Excelsior Fire Insurance Company, of New-York.— Organized December 14. 1853, 
under the Act of April 10, 1849, with a capital stock of $200,000. 

By an Act of the Legislature, passed April 17, 1862 (chap. 269, p. 464), the company was 
authorized to reduce the number of its directors to twenty-one. 

(65.) Harmony Fire and Marine Insurance Company, of New- York. —Organized December 
15. 13 j3. under the Act of April 10, 1849, as the Harmony Fire Insurance Company, with a 
capital stock of $150,000. 

Its corporate name was changed to its present name, and it was authorized to write 
Marine and Inland Navigation risks by Act of the Legislature of April 17, 1858 (chap. 311, 
p. 502). 

The company was authorized to increase its capital stock, and the number of its directors, 
by Act of the Legislature, June 7, 1862 (chap. 489, p. 987). 

Its charter was amended and capital stock increased to $300,000, May 28, 1864, under the 
Act of June 25, 1853. 

1854. 

(66.) Metropolitan Insurance Company, of New-York.— Organized April 30, 1854, under 
the Act of April 10, 1849, as the Metropolitan Fire Insurance Company, with a capital stock 
of $300,000. 

By Act of January 31, 1853 (chap. 2, p. 8), it was authorized to increase the number of its 
directors, &c. 

By the Act of April 7, 1863 (chap. 106, p. 164), the title of the company was changed to the 
present name, and it was authorized to increase its capital stock to $1,000,000. 

Its charter was amended and capital stock increased to $1,000,000, August 4, 1865, under 
the Act of June 25, 1853. 

1855. 

(67.) Relief Fire Insurance Company, of New- York.— Organized December 17, 1855, under 
the Act of June 25, 1853, with a capital stock of $150,000. 

Its charter was amended, and capital stock increased to $200,000, May 25, 1859, under the 
Act of June 25,1853. 

1856. 

(68.) Indemnity Fire Insurance Company, of New- York. — Organized April 17, 1856, under 
the Act of June 25, 1853, with a capital stock of $150,000. 

(69.) Security Insurance Company, of New-York.— Organized June 13, 1856, under the 
Act of June 25, 1853, as the Security Fire Insurance Company, with a capital stock of 
$200,000. 

Its charter was amended and capital stock increased to $500,000, July 9, 1859, under the 
Act of June 25, 1853. 

Its charter was amended, the title of the Company changed to the present name, and au- 
thority given to increase its capital stock to $5,000,000, etc., by Act of March 29, 1864 (chap. 
89, p. 130). 

Its charter was amended, and it was authorized by the Act of April 30, 1864 (chap. 430, p. 
1007), to do both Fire and Marine business. 

Its charter was amended and its capital stock increased to $1,000,000, August 13, 1864, 
under the Act of June 25, 1853. 

(70.) Hope Fire Insurance Company, of New- York.— Organized July 19, 1856, under the 
Act of June 25, 1853, with a capital stock of $150,000. 

Its charter was amended and capital stock increased to $200,000, February 8, 1860, under 
the Act of June 25, 1853. 

By Act of the Legislature, April 16, 1860 (chap. 457, p. 782), it was authorized to reduce 
the number of its directors to twenty. 

(71.) Lamar Fire Insurance Company, of New-York.— Organized December 9, 1856, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

Its charter was amended and capital stock increased to $300,000, March 15, 1859, under 
the Act of June 25, 1853. 

(72.) Lafayette Fire Insurance Company, of Brooklyn.— Organized December 22, 1856, 
under the Act of June 25, 1853, with a capital stock of $150,000. 

1857. 

(73.) Humboldt Fire Insurance Company, of New- York.— Organized April 24, 1857, under 
the Act of June 25, 1853, with a capital stock of $200,000. 



470 OFFICIAL HISTORY OF NEW-YORK FIRE COMPANIES. 

(74.) American Fire Insurance Company, of New- York.— Organized April 30, 1857, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

(75.) Mechanics' Fire Insurance Company, of Brooklyn.— Organized May 7, 1857, under the 
Act of June 25, 1853, with a capital stock of $150,000. 

(76.) Montauk Fire Insurance Company, of Brooklyn.— Organized May 22, 1857, under the 
Act of June 25, 1853, with a capital stock of $150,000. 

(77.) Resolute Fire Insurance Company, of New-York.— Organized July 18, 1857, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

(78.) Gallatin Fire Insurance Company, of New- York.— Organized August 26, 1857, under 
the Act of June 25, 1853, with a capital stock of $150,000. 

The sixth section of its charter, relating to the directors of the Company, was amended 
April 11, 1864 (chap. 163, p. 341). 

(79.) Gebhard Fire Insurance Company, of New- York.— Organized October 7, 1857, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

1858. 

(80.) Firemen's Fund Insurance Company, of New- York.— Organized May 1, 1858, under 
the Act of June 25, 1853, with a capital stock of $150,000. 

By the Act of March 31, 1866 (chap. 299), section fifteen of its charter was amended, and 
the Company was authorized to increase its capital stock to $500,000, &c. 

(81.) Kings County Fire Insurance Company, of Brooklyn.— Organized October 21, 1858, 
under the Act of June 25, 1853, with a capital stock of $150,000. 

By chap. 749 (p. 1487) of the Laws of 1865, the organization of the Company was legalized. 

(82.) Adriatic Fire Insurance Company, of New-York.— Organized November 24, 1858, 
under the Act of June 25, 1853, with a capital stock of $150,000. 

Its charter was amended and capital stock increased to $300,000, January 9, 1864, under 
the Act of June 25, 1853. 

(83.) Tradesmen's Fire Insurance Company, of New-York.— Organized December 14, 1858, 
under the Act of June 25, 1853, with a capital stock of $150,000. 

1859. 

(84.) American Exchange Fire Insurance Company, of New- York. — Organized March 1, 
1859, under the Act of June 25, 1853, with a capital stock of $200,000. 

(85.) Germania Fire Insurance Company, of New-York. — Organized March 2, 1859, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

Its charter was amended and capital stock increased to $500,000, December 30, 1863, under 
the Act of June 25, 1853. 

(86.) Firemen's Trust Insurance Company, of Brooklyn.— Organized March 15, 1859, under 
the Act of June 25, 1853, with a capital stock of $150,000. 

(87.) Standard Fire Insurance Company, of New-York.— Organized March 26, 1859, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

(88.) Importers' and Traders' Insurance Company, of New- York. — Organized March 31, 
1859, under the Act of June 25, 1853, with a capital stock of $200,000. 

(89.) Commerce Fire Insurance Company, of New-York.— Organized April 13, 1859, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

(90.) Commerce Insurance Company, of Albany.— Organized May 31, 1859, under the Act 
of June 25, 1853, with a capital stock of $200,000. 

Its charter was amended and capital stock increased to $400,000, August 18, 1865, under 
the Act of June 25, 1853. 

1860. 

(91.) Central Park Fire Insurance Company, of New- York.— Organized July 14, 1860, 
under the Act of June 25, 1853, with a capital stock of $150,000. 

(92.) Albany City Fire Insurance Company, of Albany.— Organized December 8, 1860, 
under the Act of June 25, 1853, with a capital stock of $100,000. 

Its charter was amended and capital stock increased to $200,000, December 4, 1863, under 
the Act of June 25, 1853. 

1861. 

(93.) Farmers' Joint-Stock Insurance Company, of Meridian, Cayuga county.— Organized 
April 9, 1861, under the Act of June 25, 1853, with a capital stock of $50,000. 

By the Act of March 31, 1866 (chap. 305), section nine of the charter of the Company re- 
lating to the annual election, &c, was amended. 

1862. 

(94.) Western Insurance Company, of Buffalo.— Organized May 26, 1862, under the Act of 
June 25, 1853, with a capital«stock of $100,000. 

Its charter was amended and capital stock increased to $200,000, November 23, 1863, under 
the Act of June 25, 1853. 

Its charter was amended and capital stock increased to $300,000, April 12, 1865, under the 
Act of June 25, 1853. 

The Act of May 1, 1865 (chap. 676, p. 1379), fixes the number of directors which shall con- 
stitute a quorum, etc. 

1863. 

(95.) New-York Central Insurance Company, of Union Springs.— Organized January 9, 
1863, under the Act of June 25, 1853, with a capital stock of $50,000. 



MASSACHUSETTS INSURANCE OPERATIONS. 471 

Its charter was amended and capital stock increased to $100,000, January 28, 1865, under 
the Act of June 25, 1853. 

(98.) Globe Fire Insurance Company, of New- York.— Organized March 2, 1863, under the 
Act of June 25, 1853, with a capital stock of $200,000. 

(97.) Yonkers and New- York Fire Insurance Company, of Yonkers.— -Organized March 
12, 1863, under the Act of June 25, 1853, with a capital stock of $200,000. 

Its charter was amended and capital stock increased to $500,000, August 22, 1864, under 
the Act of June 25, 1853. 

(98.) Croton Fire Insurance Company, of New- York.— Organized July 16, 1863, under the 
Act of June 25, 1853, with a capital stock of $200,000. 

1864. 

(99.) International Insurance Company, of New-York.— Organized January 5, 1864, under 
the Act of June 25, 1853, with a capital stock of $1,000,000, and by the name of the Interna- 
tional Fire Insurance Company. 

Its corporate name was changed to its present name, and it was authorized to do both 
Fire and Marine business, by Act of the Legislature, March 14, 1865 (chap. 114, p. 196). 

(100.) Sterling Fire Insurance Company, of New- York. —Organized January 18, 1864, 
under the Act of June 25, 1853, with a capital stock of $200,000. 

(101.) Hoffman Fire Insurance Company, of New- York.— Organized May 4, 1864, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

(102.) Baltic Fire Insurance Company, of New- York. —Organized June 28, 1864, under the 
Act of June 25, 1853, with a capital stock of $200,000. 

(103.) Star Fire Insurance Company, of New- York.— Organized December 2, 1864, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

1865. 

(104.) Capital City Insurance Company, of Albany.— Organized February 1, 1865, under 
the Act of June 25, 1853, with a capital stock of $200,000. 

(105.) Guardian Fire Insurance Company, of New- York.— Organized February 2, 1865, 
under the Act of June 25, 1853, with a capital stock of $200,000. 

All the existing Fire Insurance Companies incorporated in this State under 
special Acts of the Legislature, except four (the Knickerbocker, Eagle, North 
Western and National), have now been reorganized and extended under and 
in accordance with the provisions of the general Acts of 1849 or 1853. 

HISTORY OF MASSACHUSETTS INSURANCE OPERATIONS. 

The history of Massachusetts insurance companies presents an interesting 
summary of what may be called the vital statistics, or, with even greater 
propriety, the mortuary experience of the insurance companies of this State. 

It appears that since the adoption of the State Constitution, 356 special 
charters* have been granted by the legislature for the incorporation of insur- 
ance companies — there never having been in this State any general law under 
which such corporations could organize by voluntary association, as has been 
the case since 1849 in the State of New- York. Under 177 of these charters 
no company has ever been organized, or at least has ever commenced busi- 
ness. Of the 179 companies which have organized and commenced business, 
91 are still serving the public with more or less of vigor and success. The 
oldest existing company is the Massachusetts Mutual Fire Insurance Com- 
pany of Boston, whose charter was granted March 2, 1798. Of the 88 de- 
funct companies once doing business, 50 were voluntarily closed by the direc- 
tors ; five reinsured their risks ; five merged with other companies ; the 
charters of four were revoked or surrendered ; 22 were stopped by injunction, 
or otherwise passed into the custody of the law, and the precise fate of two is 
unknown. 

It is not to be inferred from this apparently disastrous record that the busi- 
ness of insurance has proved a failure in this Commonwealth. A poor satis- 
faction might be found in the fact that the history of insurance companies in 
other States and countries, as well as of some other branches of commercial 
enterprise at home and abroad, would probably exhibit, if the statistics were 
accessible, a record quite as bad, and, in some cases, certainly a good deal 
worse. 

* Not including Health Insurance Companies, none of which now exist, nor the Life 
Insurance Companies now doing business. 



472 MASSACHUSETTS INSURANCE OPERATIONS. 



FIRE COMPANIES AND BUSINESS IN MASSACHUSETTS. 

The whole number of Insurance Companies doing business in Massachusetts 
in 1868, not including the Life and Accident Companies, was 181. Of tins 
number 93 were Massachusetts Companies. Of the remaining 88 companies, 
84 were chartered in other States, and four are English Companies. This 
enumeration includes only such companies as are placed by law under the 
supervision of the Insurance Commissioner, and are required to make annual 
returns to his Department ; that is to say, it includes, so far as American Com- 
panies are concerned, only those incorporated in this and other States. 

AGGREGATE OF JOINT-STOCK COMPANIES. 
CAPITAL STOCK. 

Whole amount of outstanding capital $6,634,800 00 

of capital actually paid up in cash 6,601,800 00 

consisting of stockholders' notes 33,000 00 

par and cash market values, respectively, of each share. . 

ASSETS. 

Gross present Assets 13,981,598 23 

LIABILITIES. 

Gross present Liabilities 4,101,252 84 

INCOME. 

Cash actually received for premiums on fire risks 2,762,841 66 

on marine risks 2,735,586 6Q 

for interest and dividends 831,157 52 

from other companies, on reinsurance policies . 301,665 81 

from all other sources 77,350 23 

Gross Cash Income during the year $6,708,601 88 

EXPENDITURES. 

Cash actually paid for fire losses $1,205,804 47 

for marine losses 2,878,024 71 

for cash dividends to stockholders 561,085 79 

for brokerage and commissions on premiums 250,275 87 

for salaries and compensation of officers and employes. . 235,756 00 

for interest on borrowed money or otherwise 20,119 99 

for National taxes and duties 138.453 01 

for State and local taxes 229,756 12 

for return premiums and drawbacks 263,782 95 

for premiums an reinsurance policies 201,170 50 

for all other expenditures 171,821 05 

Gross Cash Expenditures during the year $6,156,050 46 

GENERAL ITEMS. 

Whole amount of fire risks Written during the year $289,932,214 18 

of premiums charged thereon 2,732.468 73 

of marine risks written during the year 107,212,920 00 

of cash and note premiums charged thereon 2,400,023 24 

of notes received and not paid in cash during the 

year 1,575,389 82 

of all of above risks written for less than one year 140,515,643 12 

for the term of one year 154,052,052 80 



STATE ACTION AND ITS BENEFITS. 473 

for over one and not over three years $7,467,023 91 

for more than three years 12,925,195 35 

Whole amount of fire risks outstanding at end of year 236,080,611 98 

of premiums received thereon 2,748,010 90 

of marine risks outstanding at end of year 58,017,723 00 

of cash and note premiums received thereon 1,597,945 11 

of fire losses incurred during the year 1,170,005 48 

of marine losses incurred during the year 2,670,427 61 

of all losses incurred in Massachusetts 1,519,068 48 

of dividends declared to stockholders during year 552,065 79 

average annual per centage to date 

STATE ACTION AND ITS BENEFITS. 

In 1854, the State of Massachusetts, by special legislation, 
made provision for the appointment of "Insurance Commis- 
sioners," to whose oversight matters connected with Insurance 
within the State should be committed. 

In 1859, the State of New- York established an Insurance De- J 
partment, for the supervision and regulation of Insurance inter- 
ests. The example of New-York was rapidly followed by other 
States, and the results have been most beneficial, in preventing 
mismanagement, deception, and fraud. In the year above indi- 
cated (1859) eleven new Joint-Stock Companies were organized 
in New-York State. In 1860, two were organized. In 1861, 
there were ninety-five Stock Fire Insurance Companies in New- 
York. All these, except live, were located in the cities of New- 
York and Brooklyn. 

Twenty-two of them were incorporated by special act of the 
Legislature, and the remainder of them were organized under 
the general Insurance acts of 1849 and 1853. 

As to the early operation of " Mutual Fire Companies," the 
following extract from the Report of the Superintendent of the 
Insurance Department of New-York, rendered March, 1861, is 
instructive : — 

" Since the general Insurance Act of 1849 was amended in 1853, no Mutual 
Fire Insurance Company has been organized under its provisions. Over fifty- 
four companies were incorporated in this State under the general act of 1849, 
within the period of about four years from its passage, of which number seven 
only are now in existence engaged in the transaction of business. The losses 
to the people, directly and indirectly, through these defunct ' Mutuals,' would 
average at least $50,000 for each company — thus making over two millions of 
dollars absolutely lost through these organizations, and the people are still 
harassed by the collection of assessments on their premium notes. With all 
other losses, the advantages of this dear experience in Insurance organizations 
should not also be lost to the people of this State. The fact is now patent, that 
but a small proportion of these companies were properly organized. The 
system of incorporation usually pursued is shown by my Report on an Ex- 
amination of the affairs of the Farmers' Insurance Company of Meridian, with 
the advantage in this case of having responsible makers of the notes, 

" The great mistake made was, that the Commissioners appointed on the 
organization of this class of companies accepted premium notes as capital for 
amounts far exceeding the ordinary and legitimate premiums charged in the 
regular course of business for the risks upon which the agreements for Insur- 



474 STATE ACTION AND ITS BENEFITS. 

ance were based ; and also in allowing a Mutual Fire Insurance Company to 
abandon the distinctive and peculiar line of business of such organizations, by 
issuing cash policies, in the same manner as Stock Companies. These two 
errors in regard to this class of companies have produced the most disastrous 
results ; but happily these evils have nearly all passed away, and the few 
' Mutuals ' which continue in existence, can by fair dealing redeem, to a cer- 
tain extent, the credit of Mutual companies with the public. 

" There are now twenty-five Mutual Fire Insurance Companies transacting 
business in this State. It will be seen, from the statements, that several of 
them are in a solvent and healthy condition, and it is hoped that they will 
continue in the pursuit of their legitimate business, and thus be able to furnish 
the people with cheap and safe Mutual insurance at the actual cost to the 
company." 

A fire underwriter in the Insurance Monitor gives the following 
view of the operations of the State Department of New-York : — 

" Prior to the establishment of the Insurance department of the State of 
New-York by its Legislature, in the year 1859, the condition of many of the 
Companies was such that it was no unfrequent thing to find that, after a fire, 
the assets of the company, in whose policy faith had been placed, consisted 
of a small amount of office furniture, and one or two plausible officials whose 
reception of a claim depended altogether upon the advantage that might 
accrue to them in a settlement or compromise ; and while there were many 
respectable and responsible companies throughout the State, conducting the 
business on a system of rates and settlements justified by practical experience 
and common honesty, the number of unsound companies was so large, and 
their evil influence so extensive, as to cast a shadow upon the name of all hail- 
ing from New- York. 

" The reputation of New-York companies was so low that notwithstanding 
the fact that there were, on the 1st day of January, 1861, ninety-five companies 
(joint-stock fire) doing business in the State of New- York, with an aggregate 
capital of $20,482,850, and with net assets amounting to $23,166,756, their en- 
tire cash premiums for the year 1860 amounted to only $7,261,595.52. 

" In the first annual report of the superintendent, dated March 1, 1861, he 
says : ' Experience has fully demonstrated, within the past few years, the ne- 
cessity for a strict enforcement of the laws relating to Insurance companies, 
and the need of a separate department for their organization, regulation, and 
examination.' And again : ' The establishment of an Insurance department 
coeval with the passage of the general act of 1849, would have saved our 
people millions of dollars, by the prompt enforcement of existing laws, and by 
refusing to organize unsound stock companies and that numerous class of" 
illegitimate ' Mutuals,' whose history has almost invariably been one of mis- 
management, deception, and fraud.' 

" The first year of the existence of the department was properly devoted to 
its thorough internal organization, but the attention paid by its chief to such 
organizations as the ' Hendrick Hudson,' the ' World's Safe,' and the ' Home- 
stead,' soon gave notice to all engaged in this branch of public swindling 
that their sphere of operations must be changed, and the great State of New- 
York was at last awakened to the importance of protecting the credit of her 
citizens by removing all stain upon the escutcheons of her Insurance com- 
panies. How well this has been done the record proudly testifies. 

" The subject of Insurance, so nearly allied and closely identified with the 
subject of Credit, in all its varied forms, has received the most careful study 
and attention during the past ten years, not only from those whose profession 
it is to understand it, but from the community at large, who seek its protect- 
ing influence ; and the writer does not hesitate to avow that to the manage- 
ment and direction of the present head of the Insurance Department of this 
State is due much of the wise legislation, and the eager anxiety to know the 
why and wherefore of all that pertains to the business, that is now felt by 



NATIONAL BOARD OF FIRE UNDERWRITERS. 475 

every conscientious underwriter. We append a statement of three different peri- 
ods of the history of the Fire business, viz., for the years 1853, 1860, and 1867, as 
showing the rapid strides of these companies in the confidence of the country : — 

Ypar Number of Amount Cash 

Companies. of Capital. Premiums. 

1853 64 $13,056,010 $3,800,858 75 

1860 96 20,482,860 7,261,595 52 

1867 104 28,811,332 25,310,481 79 

Showing, since the organization of the Insurance Department in 1860, an in- 
crease of forty per cent, of the aggregate fire insurance capital of the State, 
and an increase of nearly three hundred and fifty per cent, in the amount of 
premiums received for the year 1867 over that of 1860. During the same 
time, or for eight years ending December 31, 1867, the aggregate losses by 
fire, paid by the Companies referred to, amounted to $70,694,647.82, and the 
cases of loss from failure of New- York companies to meet their liabilities 
have been during the same period so inconsiderable as to be hardly worth 
mention. 

NATIONAL BOARD OF FIRE UNDERWRITERS. 

One of the most important movements in Fire Insurance that 
has ever been made in this country is the recent organization of 
a National Board of Underwriters. For the double purpose of set- 
ting forth the exact aims and bearings of this organization, and of 
here presenting recent facts and data touching Fire Insurance, we 
reproduce the main part of the Report of its Executive Committee 
at the second annual meeting, held in New- York on February 19th 
and 20th, 1868. 

" The purposes of this organization have been so often misapprehended by 
those partially informed of its objects, or so grossly misrepresented by those 
whose selfish interests were affected by its operations, that your Committee 
feel called upon to set forth anew the motives which govern you in seeking 
the aid of an association like that of the National Board. 

" [t is a well-known fact that, for years before its organization, the business 
of fire insurance was conducted with only such system, uniformity, experience, 
or skill, as the isolated and necessarily limited administration of individual 
Companies might have developed. There was little or no interchange of views 
among underwriters, little or no fellowship ; and an absolute repugnance to 
a union of experience for the guidance of the common business. So far from 
any thing like a system of statistical information being carried out under exist- 
ing circumstances, there was an effort to prevent an aggregation of the great 
mass of facts, so important when combined, yet so valueless when isolated and 
locked in the experience of individuals. The business is essentially one of 
average, and that Company has been most successful which has most closely 
studied this first principle of our business. 

" The business of even our largest companies is scarcely large enough to 
furnish a safe and reliable average ; in fact, until within a few years, fire in- 
surance has not had even a general statement of results in the necessarily 
imperfect form of official reports. These reports have been of great service, 
imperfect and unpractical as they are ; but they have, and will, ever fail to 
afford that aggregation of practical experience and skill so essential to the 
development of the great average which is the fundamental basis of the business. 
No man can safely underwrite a single risk, while he may write a thousand 
with a profit at a rate based on the average loss on a thousand risks of Hke 
character ; neither can he fix an adequate rate of premium to a single risk, 
while he may, in the light of experience, fix a proper rate to a thousand. The 
law of average prevails to a wonderful degree in many departments, subject 



476 NATIONAL BOAED OF FIRE TTNDERWRITEES. 

to the wildest caprices of chance in its individual members. Nothing but the 
winds and the waves can be more capricious and uncertain than human life in 
the individual man ; yet life itself, in the aggregate, presents an average a.s 
certain as the simplest proposition in mathematics. The average life of a 
thousand men presents a mathematical certainty, and a thousand risks on proper- 
ty, subject only to accidental destruction by fire, should present an equal cer- 
tainty for calculating the premium. The object of this organization is to 
bring face to face the practical underwriters of the country, with all their 
individual experience, and combine the same into a certain and reliable basis 
for the future conduct of the business. Whatever actual knowledge of this 
law may have been obtained by the older and more studious observers, has 
either been kept as a precious secret, never to be divulged, or has died with 
its possessor, and gone down to oblivion with the lost arts of other days. In 
fact, little or no reliable data or results of former years have been collected or 
preserved for our benefit or guidance. We can hardly estimate the value of 
a system of Classification and Statistics, of a dozen of our largest Companies, 
for the past fifteen or twenty years. It is one of the objects of this Board to 
gather, in permanent form, every thing that can be of value in determining 
the actual cost of Fire Insurance in this country ; and it is believed that an 
encouraging advance has been made in the past year, during which time we 
have circulated, from our office, over forty-five thousand documents of various 
kinds, and have sent more than four thousand letters, all of which have tended, 
more or less, to the education of underwriters throughout the country. The 
proceedings of this Board, and its various committees, have been freely circu- 
lated, and a vast amount of practical results have been obtained therefrom. 
The first great object has been to awaken an interest in the business, as one 
requiring skill and. abilities of the first order, and create in the minds of its 
managers a higher self-respect and regard for others, and a disinterested en- 
deavor on the part of all to strive for the good of common interests and in- 
creased intelligence in their management. 

" On the subject of rates much has been said and done, and no small degree 
of friction created by the advance which has been made as a matter of self- 
preservation. On this point the public have judged us from a partial view of 
the facts and necessities that demanded such advance, and have, in many 
cases, been too ready to condemn what they should have approved. No sane 
business man will say that Insurance capital is entitled to only such legal in- 
terest as it would earn in the hands of its owners individually and without 
extraordinary risk. Assuming seven per cent, as the highest interest capital 
in individual hands will command, all will be quite ready to admit, that it 
should command at least double that amount when subject to the too well 
known hazards of the business of Fire Insurance. If fourteen per cent, be 
regarded too high a rate of interest on capital liable at any time to be swept 
entirely away, as in 1835 and 1845, or partially, as in the great fires which 
have since devastated our large cities in various parts of the country, we will 
compromise on twelve per cent, and see how far below that figure the average 
dividends have fallen. 

By the tables of the New- York Insurance Department, from 1859 to the 
present time, we find for nine consecutive years the following result : — 

YEAB. CAPITAL. DIVIDENDS. P'B CTGE. 

1859 $20,007,000 00 $2,851,722 74 14-25 

1860 20,482,860 00 2,469,090 05 12-05 

1861 20,282,860 00 2,111,788 76 10-41 

1862 20,432,860 00 2,043,898 01 10-00 

1863 23,632,860 00 2,024,742 51 8"56 

1864 28,807,070 00 2,483,370 94 8-62 

1865 31,557,010 00 2,621,284 30 8-30 

1866 30,649,660 00 2,073,375 79 6-76 

1867 28,561,232 00 2,416,354 94 8"46 



$224,413,412 00 $21,095,628 04 9 40 



NATIONAL BOARD OF FIRE UNDERWRITERS. 477 

showing a decrease in per centage of average dividends from 14-25 per cent, 
in 1859, to 676 per cent, in 1866, the year of the organization of this Board ; 
and 8'46 per cent, for 1867, the first year of its efficient working ; and a 
general average for the entire nine years of only 940 per cent., a figure far 
below the compromise per centage named above. It should be borne in mind 
that the capital herein invested would have earned at least nine per cent, for 
the last five years, if invested in Government securities, without a dollar's 
risk. But at the minimum legal interest of 7 per cent, the earnings of the 
business, as such, have been only 2*40 per cent, over legal interest ; to say 
nothing of the capital that has been wholly sunk during these nine years. 
The amount of capital actually swallowed up by disasters during that time, will 
more than equal one per cent, of this sum, leaving less than one and a half per 
cent, net profits of the business, irrespective of earnings of capital. Low as 
this average is for the nine years, the average for 1866 fell 3*64 per cent, below 
it, or ^Aj- below legal interest at 7 per cent., and that, too, with an alarming 
impairment of capital itself. 

In addition to these facts, it was found that, while the amount of premiums 
in 1865 was nearly three times larger than in 1859, the losses of that year had 
increased to a figure nearly five times larger, and that the per centage of 
losses on net premiums had increased from 4257 per cent., in 1859, to 71*38 
per cent, in 1865, as will be seen from the following table : — 

YEAR. PREMIUMS. LOSSES. "P'R CTGE. 

1859 $6,299,688 16 $2,681,986 08 42-57 

1860 7,261,595 52 3,984,441 61 54"87 

1861 6,827,736 46 3,771,189 08 55-23 

1862 7,742,190 88 4,679,323 44 60-44 

1863 10,181,030 42 4,189,673 18 4115 

1864 15,618,603 82 8,737,600 30 55-94 

1865 17,052,086 97 12,046,793 77 71-38 

1866 20,786,847 47 15,312,75113 7608 

1867 22,071,638 56 .... 14,423,122 07 6534 



$113,841,418 26 $69,828,880 66 61*33 

. The subsequent results of 1866, as shown by the table, give additional 
force, in the unprecedented per centage of TQ'-f^, to the influences that de- 
manded a reform, and the per centage of 1867, with all the advantages of one 
full year of our Board, is four per cent, above the average of the nine years 
inclusive ; thus demonstrating, beyond cavil, the necessity of an increase of 
rates, and the further fact that such increase has not been oppressive or in ad- 
vance of what was demanded by the average of previous years. To all this 
may be added the large increase in expenses, caused by the inflation of the 
currency, and a most unwise competition. The expenses amounted to about 
34 per cent., in 1865 on the net cash premiums of that year. The insured may 
find matter for grave consideration in the fact that, in 1859, $719,809,620 at 
risk, had, for its protection, capital and assets to the amount of $26,323,384, 
while at the end of 1865, $2,153,595,507 had $45,360,887. 

The per centage of protection in 1859 was 365 per cent., in 1865 2-38 per 
cent., and at the end of 1866 202 per cent., showing a decrease of 163 per cent, 
of protection to the insured, an alarming decrease when applied to a sum 
nearly as large as our national debt. 

The aggregated results of all the Fire Insurance Companies in the United 
States, if they could be accurately obtained, would doubtless show similar 
results to those above cited, embracing only Companies chartered in the State 
of New- York. 

Under circumstances like these the good sense of Fire Underwriters, in all 
parts of the country, call loudly for reform and union of action for preservation 
from impending and certain ruin to. these great interests. 



478 FORM OF FIRE POLICY. 



FORM OF FIRE POLICY ADOPTED BY THE NATIONAL BOARD OF 
UNDERWRITERS. 

The first subject which claimed the attention of the National 
Board of Fire Underwriters, after its organization on the 19th 
July, 1866, was a resolution "recommending that the Executive 
Committee draft a Fire Policy to be used by all Fire Insurance 
Companies belonging to the Association." 

As the result, a form was presented and adopted at the second 
annual meeting, in February, 1866, with accompanying remarks, 
as follows : 

" This form has on its own merits found favor with the companies of the city 
of New- York, and is gradually passing into general use in advance of its adop- 
tion by the National Board. No less than thirty-three companies of that city 
are now using it in their daily business, and many more are only waiting for 
their present edition of policies to be exhausted to also adopt it. 

" One of the strongest objections that has been urged against the Form has 
been that it was too long ; but the Committee beg to remark that to make a 
perfect instrument this is unavoidable, and a comparison recently made with 
some of the policies in general use in Continental Europe among the staunch- 
est and most prosperous of their companies, shows that in the number of their 
conditions their Policies exceed our proposed Form by twelve, while the mat- 
ter contained in them is one-third greater. The Committee have caused to 
be translated and appended to this report the conditions of the policies of the 
' Deutscher Phoenix ' of Frankfort-on-the-Main, and of ' L'Union ' of Paris, 
the first being a company of 5,500,000 guilders capital, and embracing in its 
direction a member of the house of Rothschild, with other eminent and lead- 
ing merchants of the principal cities of Germany ; the latter, established in 
1828, and also a representative company. An examination of these conditions 
establishes the fact that, in their general scope and character, they do not dif- 
fer from our own, except in a more thorough and definite statement of the 
rights of the companies than we have ever deemed it expedient to make. 

" The ' Form ' recommended is that in almost universal use, and has the 
merit of being also in the form of a legal contract. While the great benefit 
accruing to both companies and their dealers, from uniformity of policies, 
cannot be questioned ; the prevention of disputes after losses have occurred, 
and the full protection afforded, must of themselves be the best commendation 
that can be offered in favor of a uniform policy. 

" It is worthy of note that all policies issued upon the Continent of Europe 
have the printed conditions or articles of insurance in advance of the written 
portion of the policy, and not after it, as we provide. 

"FORM OF POLICY. 

" And the said hereby agrees to make good unto the said assured, 

executors, administrators, and assigns, all such immediate loss or damage, not exceeding in 
amount the sum or sums insured, as above specified, nor the interest of the assured in the 
property, except as herein provided, as shall happen by fire to the property so specified, from 
the day of one thousand eight hundred and at twelve o'clock at 

noon, to the day of one thousand eight hundred and at twelve 

o'clock at noon ; the amount of loss or damage to be estimated according to the actual cash 
value of the property at the time of the loss, and to be paid sixty days after due notice and 
proofs of the same shall have been made by the assured and received at this office, in accor- 
dance with the terms and provisions of this Policy, unless the property be replaced, or the 
Company shall have given notice of their intention to rebuild or repair the damaged pre- 



1. If an application, survey, plan, or description of the property herein insured is referred 
to in this Policy, such application, survey, plan, or description shall be considered a part of 
this contract, and a warranty by the assured ; and any false representation by the assured of 
the condition, situation, or occupancy of the property, or any omission to make known every 
fact material to the risk, or an over-valuation, or any misrepresentation whatever, either in 



FORM OF FIRE POLICY. 479 

a written application or otherwise ; or if the assured shall have, or shall hereafter make any 
other insurance on the property hereby insured, or any part thereof, without the consent of 
the Company written hereon, or if the above-mentioned premises shall be occupied or used 
so as to increase the l'isk, or become vacant or unoccupied, and so remain for more than 
thirty days without notice to, and consent of, this Company in writing, or the risk be in- 
creased by the erection or occupation of neighboring buildings, or by any means whatever 
within the control of the assured, without the assent of this Company indorsed hereon ; or 
if it be a manufacturing establishment running in whole or in part over or extra time, or 
running at night, or if it shall cease to be operated, without special agreement indorsed on 
this Policy ; or if the property be sold or transferred, or any change take place in title or 
possession, whether by legal process, or judicial decree, or voluntary transfer, or convey- 
ance : or if this Policy shall be assigned before a loss, without the consent of the Company 
indorsed hereon ; or if the interest of the assured in the property, whether as owner, trus- 
tee, consignee, factor, agent, mortgagee, lessee, or otherwise, be not truly stated in this Po- 
licy ; or if the assured shall keep gunpowder, fire-works, nitro-glycerine, phosphorus, salt- 
petre, nitrate of soda, petroleum, naphtha, gasoline, benzine, benzole or benzine varnish, or 
keep or use camphene, spirit-gas, or any burning fluid or chemical oils, without written per- 
mission in this Policy ; then, and in every such case, this Policy shall be void. 

2. This assurance does not apply to or cover jewels, plate, watches, musical or scientific 
instruments (piano-fortes in dwellings excepted), ornaments, medals, patterns, printed mu- 
sic, printed books, engravings, paintings, picture-frames, sculpture, casts, models or curiosi- 
ties, unless particularly specified in this Policy. This Company shall not be liable by virtue 
of this Policy, or any renewal thereof, until the premium therefor be actually paid ; nor for 
loss by theft at or after a fire ; nor for money or bullion, bills, notes, accounts, deeds, evi- 
dences of debt, or securities of properties of any kind ; nor for any loss or damage by fire 
caused by means of an invasion, insurrection, riot, civil commotion, or military or usurped 
power ; nor for any loss in buildings unprovided with good and substantial stone or brick 
chimneys, the absence of which has been the cause of the fire ; nor in consequence of any 
neglect or deviation from the laws or regulations of police, where such exist ; nor for any 
loss caused by the explosion of gunpowder, or any explosive substance ; nor by lightning, or 
explosions of any kind, unless fire ensues, and then for the loss or damage by fire only, which 
loss shall be determined by the value of the damaged property after the casualty by explosion 
or lightning. 

3. If a building shall fall, except as the result of a fire, all insurance by this Company on it 
or its contents shall immediately cease and determine. 

4. If the interest of the assured in the property be any other than the entire, unconditional, 
and sole ownership of the property, for the use and benefit of the assured, or if the building 
insured stands on leased ground, it must be so represented to the Company, and so express- 
ed in the written part of this Policy, otherwise the Policy shall be void. When property has 
been sold and delivered, or otherwise disposed of, so that all interest or liability on the part 
of the assured herein named has ceased, this insurance on such property shall immediately 
terminate. Goods held on storage must be separately and specifically insured. 

5. If, during this insurance, the above-mentioned premises shall be used for any trade, 
business or vocation, or for storing, using, or vending therein any of the articles, goods, or 
merchandise denominated hazardous, or extra-hazardous, or specially hazardous in the se- 
cond class of hazards printed on the back of this Policy ; or if the occupation of such pre- 
mises be changed from one of the class denominated extra-hazardous or specially hazardous 
to that of another of the same class, except as herein specially agreed to in writing upon this 
Policy, then and from thenceforth, so long as the same shall be so appropriated, applied, or 
used, this Policy shall cease, and be of no force or effect. 

6. The best endeavors of the assured shall be used in saving and protecting the property 
from damage at and after the fire ; and in case of failure so to do, this Company will not be 
liable for damage caused by such failure ; and there can be no abandonment to the Company 
of the property insured. 

The use of general terms, or any thing less than a distinct, specific agreement, clearly ex- 
pressed and indorsed on this Policy, shall not be construed as a waiver of any printed or 
written condition or restriction therein. 

7. In case of any other insurance upon the property hereby insured, whether made prior 
or subsequent to the date of this Policy, the assured shall be entitled to recover of this Com- 
pany no greater proportion of the loss sustained than the sum hereby insured bears to the 
whole amount insured thereon ; and it is hereby declared and agreed that, in case of the as- 
sured holding any other Policy in this or any other Company on the property insured, sub-, 
ject to the conditions of average, this Policy shall be subject to average in like manner. 

Reinsurance, in case of loss, to be settled in proportion as the sum reinsured shall bear 
to the whole sum covered by the reinsured company. 

8. This insurance may be terminated at any time at the request of the assured, in which 
case the Company shall retain only the customary short rates for the time the Policy has 
been in force. The insurance may also be terminated at any time at the option of the Com- 
pany, on giving notice to that effect, and refunding a ratable proportion of the premium for 
the unexpired term of the Policy. 

9. Persons sustaining loss or damage by fire shall forthwith give notice of said loss to the 
Company, and, as soon thereafter as possible, render a particular account of such loss, sign- 
ed and sworn to by them, stating whether any and what other insurance has been made on 
the same property, giving copies of the written portion of all Policies thereon, also the actual 
cash value of the property and their interest therein, for what purpose or by whom the 
building insured, or containing the property insured, and the several parts thereof, wero 
used at the time of the loss, when and how the fire originated, and shall also produce a cer- 
tificate under the hand and seal of a Magistrate or Notary Public (nearest to the place of the 
fire, not concerned in the loss as a creditor or otherwise, nor related to the assured), stating 



480 FORM OP FIRE POLICY. 

that lie has examined the circumstances attending the loss, knows tile character and circum- 
stances of the assured, and verily believes that the assured has, without fraud, sustained loss 
on the property insured, to the amount which such Magistrate or Notary Public shall certify. 
The assured shall, if required, submit to an examination or examinations under oath by any 
person appointed by the Company, and subscribe to such examinations when reduced to 
writing, and shall also produce their books of account and other vouchers, and exhibit the 
same for examination at the Office of the Company, and permit extracts and copies thereof 
to be made ; the assured shall also produce certified copies of all bills and invoices, the ori- 
ginals of which have been lost, and shall exhibit all that remains of the property which was 
covered by this Policy, damaged or not damaged, for examination to any person or persons 
named by the Company. 

When personal property is damaged, the assured shall forthwith cause it to be put in 
order, assorting and arranging the various articles according to their kinds, separating the 
damaged from the undamaged, and shall cause an inventory to be made, and furnished to the 
Company, of the whole, naming the quantity, quality, and cost of each article. The amount 
of sound value and of damage shall then be ascertained by appraisal of each article by com- 
petent persons (not interested in the loss as creditors or otherwise, nor related to the assured 
or sufferers), to be mutually appointed by the assured and the Company ; their report, in 
writing, to be made under oath before any magistrate or other properly commissioned person ; 
one-half of the appraiser's fee to be paid by the assured. The Company reserves the right 
to take the whole or any part of the articles at their appraised value ; -and until such proofs, 
declarations, and certificates are produced, and examinations and appraisals permitted by the 
claimant, the loss shall not be payable. 

In case of loss on property held in trust, or on commission, or if the interest of the assured 
be other than the entire and sole ownership, the names of the respective owners shall be set 
forth, together with their respective interests therein. If this Policy is made payable, in 
case of loss, to a third party, or held as collateral security, the proofs of loss shall be made 
by the party originally insured, unless there has been an actual sale of the property insured. 
All fraud or attempt at fraud, by false swearing, or otherwise, shall cause a forfeiture of all 
claim on this Company under this Policy. 

But provided, in case differences shall arise touching any loss or damage after proof thereof 
has been received in due form, the matter shall, at the written request of either party, be 
submitted to impartial arbitrators, whose award in writing shall be binding on the parties as 
to the amount of such loss or damage, but shall not decide the liability of the Company 
under this Policy ; and, provided further, that it shall be optional with the Company to 
repair, rebuild, or replace the property lost or damaged with other of like kind and quality 
within a reasonable time, giving notice of their intention so to do within thirty days after 
receipt of the proofs herein required ; and in case this Company elect to rebuild, the assured 
shall, if required, furnish plan and specifications of the buildings destroyed. 

The cash value of property destroyed or damaged by fire shall in no case exceed what 
would be the cost to the assured, at the time of the fire, of replacing the same ; and in case 
of the depreciation of such property, from use or otherwise, a suitable deduction from the 
cash cost of replacing shall be made, to ascertain the actual cash value. 

10. This insurance, the risk not being changed, may be continued for such further time as 
shall be agreed on, provided the premium therefor is paid and indorsed on this Policy, or a 
receipt given for the same, and it shall be considered as continued under the original repre- 
sentation, and for the original amounts and divisions, unless otherwise specified in writing ; 
but in case there shall have been any change in the risk, either within itself or by neighbor- 
ing buildings, not made known to the Company by the assured at the time of renewal, this 
Policy and renewal shall be void. 

11. It is a part of this contract that any person, other than the assured, who may have 
procured this insurance to be taken by this Company, shall be deemed to be the agent of the 
assured named in this Policy, and not of this Company under any circumstances whatever, 
or in any transaction relating to this insurance. 

12. It is furthermore hereby expressly provided and mutually agreed, that no suit or action 
against this Company, for the recovery of any claim by virtue of this Policy, shall be sus- 
tainable in any Court of Law or Chancery, until after an award shall have been obtained, 
fixing the amount of such claim in the manner above provided, nor unless such suit or action 
shall be commenced within twelve months next after the loss shall occur ; and should any 
suit or action be commenced against this Company after the expiration of the aforesaid 
twelve months, the lapse of time shall be taken and deemed as conclusive evidence against 
the validity of such claim, any statute of limitation to the contrary notwithstanding. 

(ESP™ Gas — -The generating or evaporating within the building or contiguous thereto of 
any substance for a burning gas, or the use of gasoline for lighting, is prohibited under this 
Policy, unless permitted in writing hereon. 

|W° Fences and other Yard Fixtures, also Store Furniture and Fixtures, are not insured 
under the within Policy, unless separately and specifically mentioned. 

j£IP" Builders'' Bisk.— The working of carpenters, roofers, tinsmiths, gas-fitters, plumbers, 
or othei mechanics, in building, altering, or repairing the premises named in this Policy, will 
vitiate tho same, unless permission for such work be indorsed in writing hereon, except in 
dwelling-houses only, where five days are allowed in any one year for incidental repairs, 
without notice or indorsement. 

^W And it is hereby understood and agreed by and between this Company and 
the assured, that this Policy is made and accepted in reference to the foregoing terms and 
conditions, and to the classes of hazards and memoranda printed on the back of this Policy, 
which are hereby declared to be a part of this contract, and are to be used and resorted to 



FORM OF FIRE POLICY. 



481 



in order to determine the rights and obligations of the parties hereto, in all cases not herein 
otherwise specially provided for in writing. 

In Witness Whereof have have caused these Presents to be signed by their 

President, and attested by their Secretary, or other officer, in the this 

day of in the year of our Lord one thousand eight hundred and 



President. 



Secretary. 



Annexed are translations of the Foreign Policies referred to in the above 
Report. 

[translation.] 

"THE UNION 




FIRE INSURANCE COlMIFAIsrY. 

Chartered 5th October, 1828. 



No. 35,025. 

Amottnt Insured, 
Fr. 48,000. 

PREMIUM, 
Fr. 37.60. 



CITY OF PARIS 

INSURANCE 

POLICY. 



MR. RITTER. 

TERM, 

TEN YEARS. 

From 13th Feb. 1857, 

To 13th Feb. 1867. 



"GENERAL CONDITIONS. 



"Art. 1. The Company insures the personal and real property described in the present 
Policy against damage by Fire, even if the fire should be caused by lightning. The Company 
insures, moreover, in case of fire, the following risks, when the same are stipulated in the 
Policy, viz.: 

Tenant's Bisk ; that is to say, the effects of the responsibility for which the party insured 
is liable as a tenant, according to articles 1733 and 1734 of the Code Napoleon. 

Claims of^ Neighbors ; to wit, the consequences of any action that neighbors may take 
against the insured on the plea of communicating fire to their property, as provided for by 
Articles Nos. 1382, 1383, and 1384 of the same Code. 

Claims of Tenants against the Owner, for damage caused to their furniture and goods, in 
accordance with the cases provided for by Articles 1386 and 1721 of the same Code. 

Art. 2. The Company will not be responsible in cases of fire occasioned by war, invasion, 
riot, military force of any kind, volcanoes, and earthquakes. 

Art. 3. The Company will not insure storehouses, or magazines, or manufactories of 
gunpowder, deeds of all kinds, precious stones and jewels, gold and silver bullion and coin. 

In case of explosion or detonation, even when caused by lightning, the Company will not 
be responsible for the damage resulting therefrom, but will only guarantee to make good the 
damage from fire caused thereby. 

The Company will not be responsible for articles lost or stolen, nor for laces, cashmeres, 
jewelry, medals, plate, pictures, statues, and generally all rare or precious articles, whether 
movable or fixed, unless the same shall be insured for special and specific sums. 

The Company will be responsible for material damage only, and shall not be held to grant 
any indemnity for change of street line, lack of tenants or profit, cancelment of leases, inoc- 
cupation, cessation of labor, or for any other loss not material. All the above exceptions 
shall apply equally to the insurance of the risks mentioned in the third, fourth, and fifth para- 
graphs of Art. 1 . 

Art. 4. The insurance shall in no case result to the profit of the party insured, but shall 
guarantee to him only indemnity for such actual loss as he may sutler ; consequently the party 
insured shall not be entitled to cite or give as evidence the amounts insured, the premiums 
paid, or the designations and valuations contained in the Policy as an acknowldgement or 
proof of the existence and value of the articles insured, either at the time of contracting the 
insurance or in case of fire. 

Art. 5. Premiums are payable in advance at the head office of the Company in Paris, 

No receipt for premiums shall be valid unless mentioned in the Policy or taken from the 
register of renewal receipts with counterparts. 



482 FOEM OF FIRE POLICY. 

The first year's premium must be paid down upon the Policy being signed, from which 
time the insurance shall take immediate effect, or the premium for the first year shall be paid 
upon the day that the insurance commences. In all cases the Policy shall not be binding 
until after the payment of the first year's premium. 

The simple payment of the premium before the Policy is signed shall not bind either the 
applicant or the Company ; and they shall only be bound after the Policy is signed by both 
parties. 

Art. 6. The premiums for the years subsequent to the first year shall be paid at the latest 
within fifteen days after the same become due. 

In default of the payment of any one premium within fifteen days after due, the force of 
the insurance shall be suspended without it being necessary to make any demand or legal 
summons for payment, and the party insured, in case of loss, shall not be entitled to any 
indemnity. 

The insurance shall remain suspended even during the proceedings taken by the Company 
to collect the over-due premium ; but the Policy shall in all cases become again valid, datinsr 
from the noon of the day following that on which the payment of the over-due premium ana 
the costs, if any, shall be made to and accepted by the Company. It is understood that the 
payment of an over-due premium during or after a fire shall not give the party insured any 
right to indemnity. 

The collection of former premiums made by the Company at the residences of parties 
insured shall not be considered as affecting the preceding stipulations. 

If the premium is not paid within the period of one year dating from the time when due, 
the Policy shall be considered cancelled at law for the time still to run, without the necessity 
of giving any notice to that effect. The unpaid premium shall remain due to the Company 
as indemnity. 

In case of legal proceedings, the Policy shall not be considered as legally cancelled until one 
year after the last act in such process at law. 

Akt. 7. The party insured must declare and cause to be stated in the Policy, under penalty 
of forfeiting all right to indemnity in case of fire, whether the property insured belongs 
wholly or only partially to him, whether he owns the ground upon which the building insured 
is situated, whether he is a party deriving profit from the property, or a creditor, tenant, or 
agent, and generally in what capacity he acts. 

Art. 8. In the event of the sale or deed of gift of the property insured, the seller or donor 
shall require the new proprietor to execute the Policy, otherwise he shall pay the Company, 
in addition to the premiums due, an indemnity equal to one year's premium. 

In case of death, sale, or deed of gift, the heirs or new proprietors shall declare their quali- 
fications within one month following the death, sale, or deed of gift, and cause such declara- 
tion to be mentioned in the Policy. 

In case of dissolution of copartnership, suspension of payment or failure, the party 
insured or his assigns are required to immediately declare such dissolution of copartnership, 
suspension, or failure, and cause their decimation to be noted on the Policy. 

Art. 9. The party insured shall be required to notify the Company, and cause such notifi- 
cation to be mentioned on the Policy, and to pay an additional premium if required, in the 
following cases, to wit : 

Before making changes or additions in buildings insured, or containing property insured, 
which shall multiply or increase the risk. 

Before erecting in such buildings or in contiguous buildings, any factory, work, or steam- 
engine, or establishing any trade or industry that shall increase the risk from fire. 

Before placing in such building provisions, goods, or any articles whatsoever which might 
add to the perils of fire. 

Before transporting the property insured to a place other than that designated in the 
Policy. 

Before transferring the insurance on tenant's risks and claims of neighbors from one place 
to another. 

If buildings roofed with wood or thatch, a theatre, factory, or foundry, should be erected 
upon property contiguous to that assured, the party insured shall give notice within a month 
at the latest after the establishment and construction of such buildings, and cause his decla- 
ration to be noted on the Policy, and pay an additional premium. 

Art. 10. If the party insured shall have covered the property specified in this insurance 
prior to the date of the present Policy, or if he shall subsequently guarantee such property 
for whatever cause and amount whatsoever, in any mutual association or by any under- 
writers of any name or denomination, he shall declare the same, and cause it to be noted in 
the Policy. 

If the party insured shall have previously covered, or if he shall subsequently cover 
articles other than those included in this insurance but forming part of one and the same 
risk, he shall likewise be required to declare the fact, and cause the same to be mentioned in 
the Policy. « 

Art. 11. Upon receiving the declarations required by Articles 8, 9, and 10, the Company 
reserves to itself the right to cancel the Policy by giving simple notice to that effect, and the 
premiums paid or due shall belong to the Company. 

In default of receiving such declarations within the time specified, and of the mention of 
the same on the Policy, the insurance shall be suspended, and the insured, his representa- 
tives or assigns shall not have any right to indemnity in case of fire. 

Art. 12. All concealment, or false declarations on the part of the insured tending to dimin- 
ish the degree of risk or change its character, shall render the insurance void ; and it shall 
be void even when such concealment or false declaration do not affect the loss or damage 
caused to the property insured. (Art. 348, Commercial Code.) 

Art. 13. Immediately upon a fire breaking out, the party insured shall employ all means in 
his power to arrest its progress and save the property insured. 



FORM OF FIRE POLICY. 483 

The Company will take into account all damage and cost occasioned by removal, on proper 
proof. 

The party insured is required to give immediate notice to the manager in Paris, in case 
of fire. 

Art. 14. Immediately after a fire, the party insured shall make a declaration of the same, 
at his own cost, before the Justice of the Peace of the district, and this declaration shall 
state the precise time of the occurrence of the fire, its duration, the known or presumptive 
origin of the same, the means taken to arrest its progress, as well as all other incidental cir- 
cumstances ; and shall also specify the nature and approximate amount of the damage sus- 
tained. A formal copy of this declaration shall be forwarded to the Company without delay. 
The party insured shall further be required to draw up and transmit a statement of the ar- 
ticles burned, damaged, and saved. If the party insured shall not transmit the documents re- 
quired by the present Article within fifteen days after the occurrence of the fire, he shall for- 
feit all rights and claims upon the Company, unless in the case of proof that he was unable 
to do so. 

Art. 15. In case buildings insured by the Company shall be damaged or destroyed by order 
of the authorities, for the purpose of checking the progress of a fire, in such case, the Com- 
pany will make good the loss. 

Art. 16. The insured shall be required to prove, by all the means and documents in his 
possession, the existence and value of the property insured, at the time of the occurrence of 
the fire, as well as the amount of the damage sustained. 

The Company shall be entitled to require the party insured to make oath to his statements 
in due form according to law. 

Any party insured who shall knowingly exaggerate the amount of his damage, or who 
shall assume articles to have been destroyed by the flames, when they did not exist at the 
time of the fire, or who shall misrepresent or remove a part or the whole of the articles 
saved, or who shall present untrue and fraudulent documents and means as evidence, or who, 
finally, shall have willingly caused the destruction by fire of the property insured, shall for- 
feit all rights to indemnification, and the Company shall be at liberty to cancel all the Policies 
that it may have granted to said insured. 

Art 17. Damages for loss by fire shall be adjusted either by private agreement, or be ap- 
praised after investigation by two experts selected by the parties, either on the spot or else- 
where. If the experts cannot agree, they shall choose a third arbitrator, the three acting in 
common accord, the majority ruling. The parties may require that the third arbitrator shall 
be chosen at a point other than that where the party insured may reside. In case either of 
the parties shall fail to appoint his arbitrator, or in case the two experts shall neglect to 
name a third expert, the same shall be appointed, at the request of the most earnest of the 
two parties, by the President of the Civil or Commercial Court of the district. 

In all cases, the cost of appraisement shall be borne equally — one-half by the Company and 
the other half by the party insured. 

Art. 18. Real property, exclusive of the value of the soil, and personal property, shall be 
appraised at their actual value at the time of the fire. Provisions and goods shall be esti- 
mated at the prices current on the day of the fire. Articles and goods in course of manufac- 
ture shall be appraised at the rate of the raw material, with the addition of the cost of manu- 
facture, up to the date of the fire. 

Art. 19. If it should result upon valuation by private agreement or from the appraisers' 
formal valuation, that the value of the property insured is less than the amount insured, the 
party insured shall be entitled to receive compensation only for the actual and proven loss. 
If, on the contrary, it should appear, that the value of the property covered by the Policy, 
exceeded at the time of the fire the sum insured, in such case the party insured shall be con- 
sidered as his own underwriter for such excess, and in this capacity he shall bear his share 
of the loss in the proper proportion. 

Should there be several insurers, and if the declarations required by the first paragraph of 
Article 10 have been noted, the Company, in case of fire, shall bear its due proportion of the 
loss adjusted, according to the conditions of the present policy. 

In no case shall the Company be required to pay more than the sum insured by it, and its 
share of the cost of appraisement. 

Art. 20. The insured shall not make any abandonment, either total or partial, of the pro- 
perty insured, whether damaged or undamaged. 

The Company shall be entitled to take either all or a portion of the damaged property and 
materials appertaining to burned buildings, at their appraised value. 

The Company may, within a period specified by the arbitrators or fixed by private agree- 
ment, cause any building damaged or destroyed by fire to be repaired or reconstructed, ac- 
cording to the opinion of the appraisers. The Company may likewise repair or replace in 
kind, the whole or a portion of the articles damaged or destroyed by fire. 

Art. 21. The insurance of tenants' risks is based upon the total value of the building when 
it is occupied by only one tenant, and in this case the loss by fire is regulated in accordance 
with Articles 18 and 19. In case there should be several tenants, the tenant's risk is based 
upon the amount of rent. 

If the tenant should have covered a sum equal to at least fifteen times the annual amount 
of his rent, the Company will be responsible in his stead, for the total damage up to 
the amount of the sum insured. 

If he has insured a less sum, the Company will only be responsible for damage in the pro- 
portion existing between the amount insured and fifteen years' rent. 

Art. 22. In case of fire, or in the case provided for by Article 15, the Company reserves to 
itself its rights, and those of the party insured, against all defendants generally, in whatso- 
ever capacity they may come, and especially against tenants, neighbors, incendiaries, mu- 
tual insurance associations, underwriters, insuring for premiums or otherwise ; and to thia 
end and effect, the party insured, as far as he is concerned, hereby delegates his rights to the 



484 FORM OF FIRE POLICY. 

Company, without requiring any guarantee by this policy alone, dispensing with any other 
instrument of cession, transfer, deed, or conveyance. The party insured is bound, at the 
request of the Company, to confirm and reiterate this delegation and assignment of his rights 
in a separate instrument, drawn up before a notary ; and furthermore, to reiterate the dele- 
gation in his receipt for payment of damages. 

Should fire be communicated from a building insured by the Company to another building 
also insured by it, the Company may refrain from taking proceedings against the party in- 
sured, whose building communicated the fire to the other ; but this shall apply only to real 
and immovable property. 

Art. 23. The amount of the adjusted damage is payable in cash, at the head office of the 
Company. 

After a loss, whatever may be the amount of the damage, the Company may cancel the 
Policy, either in full or partially, by a simple notice to that effect ; the premium or premiums 
paid belonging to the Company. 

Art. 24. All suits for recovery of damages must be brought within six months after the 
date of the fire or the last paper sent in regarding the claim. Consequently, after the expira- 
tion of that term, the Company cannot be required to make any compensation." 



[translation.] 

THE GERMAN PHCENIX INSURANCE COMPANY 

OF FRANKFORT-ON-THE-MAIN. 

GENERAL CONDITIONS. 

" Art. 1. The Company insures against damage by fire, and guarantees not only indemnifica- 
tion for actual and direct damage by fire, but agrees, moreover, to make good all loss that 
may occur to the property insured by lightning, water, damage in attempting to save and re- 
move goods, as well as the value of missing articles, upon proper proof. When buildings in- 
sured by the Company shall be torn down, in cases of conflagration, by order of the competent 
authorities, the Company will make good the loss to the insured. 

The Company will not make good any loss by fire resulting from the effects of war, military 
forces, rebellion, riot, illegal force, earthquakes, volcanic eruptions, or gross neglect on the 
part of the person or persons insured. In case of explosion the Company will not be respon- 
sible for the destruction caused thereby, but will make good any damage by fire so origin- 
ated. By special agreement, and upon the payment of an additional premium, the Company 
will become responsible for damage caused by explosions disconnected from loss by fire. 

In case of damage to or the loss of articles by water, or in attempting to save the same, 
the Company will not grant compensation unless the building containing them or that im- 
mediately contiguous shall be on fire. Compensation for articles missing will only be allowed 
when the party insured shall, within three days after the fire, give notice thereof to the 
proper authorities, with an exact statement of the missing objects. In any event, no com- 
pensation shall be paid for such articles until after the conclusion of the investigation ordered 
by the authorities. The obligations of the Company towards the party insured are defined 
solely by the contents of the policy and renewals. 

Art. 2. The Company does not insure powder-mills, or depots or magazines for the stor- 
age of gunpowder ; and, furthermore, documents of every description, especially securities, 
coin and paper money, jewels, real gems, gold and silver in bars are entirely excluded from 
insurance. Lace, cashmeres, ornaments, medals, gold and silver tissues, paintings, statuary, 
and especially all rare and costly articles, as well as such objects as have an imaginary and 
extrinsic value, whether personal or real, shall not be held to be insured unless specially 
specified in the policy. With regard to buildings, all parts not specially excepted in the con- 
ditions, and thus, consequently, the cellars and foundations, are included in the insurance. 
Articles situated outside the limits specified in the Policy are not considered to be insured. 

Art. 3. In order that the insurance may not prove an incentive to improper gain on the 
part of the insured, the said party shall not be entitled to make use of indirectly, or refer to 
the amount insured, or the premiums paid, or the descriptions and estimates contained in 
the Policy as an acknowledgment, or proof, or presumption of the value, or even of the ex- 
istence of the articles insured ; moreover, the party insured is bound to show to the Compa- 
ny the existence and value of the articles insured at the time of the fire by all means and 
certificates in his power, as well as the genuineness and amount of the damage sustained. 

Art. 4. The party insured is bound to answer correctly the questions printed on the Form 
of Application, and to state accurately, in any documents executed by him and attached to 
said Application, all facts regarding the danger of fire and the nature of the articles propos- 
ed to be insured. 

Art. 5. The party insured must declare, and cause to be stated in the Policy, whether he 
is the owner of a part or of the whole of the articles insured, or whether he is acting as 
user, creditor, manager, attorney, or in whatever other capacity. 

Art. 6. If, at the time of the issuing of the present Policy, the property shall have been 
insured elsewhere, notice thereof shall be given and mentioned in the Policy. 

Art. 7. The insurance shall not be valid except upon due payment of the premiums. The 
acceptance of the Policy and of the Renewal Receipts by the insured shall constitute his 
assent to the premium and duration of the insurance as therein expressed. The party in- 
sured is bound to pay his premium without being summoned to the Agent of the Company 
at the latter's domicile, and the Company is not bound to demand payment of the same. If 
the annual premium upon an insurance, contracted for a term of years, shall not be paid at 



FORM OF FIRE POLICY. 485 

the commencement of each insurance year, then the insurance shall he void, hut the Compa- 
ny shall have the right to collect the premium by due process of law. The insurance shall 
not be considered to be again in force until after the expiration of twenty-four hours after 
all unpaid back-premiums shall have been paid and received. No return of premiums once 
paid shall be made, with the exception of the case mentioned in Article No. 18. Payment of 
a premium or premiums previously lapsed made during or after a fire shall give no right to 
indemnification. 

Art. S. If, during the term of the insurance, the risk from fire should increase— if the pro- 
perty insured should change owners— if the property insured should be transferred to other 
premises than those specified in the Policy, or if the property should be insured by another 
Company, then, in each and all of these cases, the further continuance of the insurance shall 
be subject to the consent of the Company. The party insured shall be required to apply for 
such consent in writing, and, if the same be granted, a memorandum to that effect shall be 
made. 

Art. 9. In case of a fire occurring, it shall be the duty of the party insured to do his utmost 
to save the articles insured, and to' give attention to the safety of the same to his best abili- 
ty both during and after their removal. But such removal shall only be made in accordance 
with the provisions of Article 1, above stated, and not against the orders of the agent or 
contrai'y to special conditions of insurance. Immediately upon the breaking out of a fire, 
the agent for the district must be notified, or, in his absence, the head agent. When such 
immediate notification is not possible, notice must, in any event, be given within twenty- 
four hours after the occurrence of the fire. In case there should be no agent of the Compa- 
ny in the locality, notice of the fire must then he sent to the manager of the Company. 

Art. 10. In case of loss or damage, the party insured shall be bound as follows, viz. : 

A. To make a deposition and statement of his own accord within three days after the fire, 
before the proper authorities, as to the time of the outbreak of the fire, the duration thereof, 
and the known or supposititious causes of the same, the means employed to extinguish it, 
together with any and all circumstances relevant thereto, as well as the nature and probable 
amount of the damage sustained. A certified copy of the formal investigation must be for- 
warded to the agent within fourteen days, or, in case there should be no agent in the locality, 
then to the director of the Company. 

B. In the case of movable property, the party insured shall, within fourteen days after the 
fire, transmit to the agent a statement, duly signed, specifying the articles on hand at the 
time of the fire, those burned, lost, saved in damaged condition, and those remaining with- 
out damage, together with a special statement of the value thereof. This document must be 
drawn up with the most conscientious accuracy ; it must not contain a missing article as 
burnt or lost, nor must the existence of any article saved be withheld. The periods of time 
above mentioned, in case of physical disability, shall commence from the date of cessation of 
such disability. 

Art. 11. The Company shall have the right to require the party insured to prove the ac- 
tual amount of goods on hand, and the value of the same at the time of the fire, as well as 
the amount of damage sustained by him, by the production of his books, invoices, accounts, 
and other vouchers, and to require him to make oath to the truth of his statements in due 
legal form. 

Art. 12. Any party insured who shall contravene any of the conditions of Articles 4 to 11, 
or who shall not entirely fulfil the obligations therein expressed, or who shall be guilty of 
making an unwarranted declaration or a concealment of fact, as referred to in clause B of 
Article 10, or who shall make use of false or deceitful meaus in his own interest, or who, 
finally, shall himself set fire to property insured, or cause the burning of the same by gross 
negligence, shall forfeit all claim to indemnification. 

Art. 13. Damage by fire shall be adjusted either by mutual agreement or by investigation 
and appraisement of two experts selected in the locality. Each side shall appoint one ap- 
praiser, and, in case these appraisers cannot agree, then they shall choose an umpire. The 
three arbitrators shall act together and submit to the majority of votes among themselves. 
Both parties shall be allowed to demand that the umpire be chosen in a locality other than 
that wherein the party insured resides. Should one of the parties neglect to name an arbi- 
trator, the nomination of the same shall devolve, at the request of the other party, upon the 
presiding officer of the proper court, in accordance with Article 21. And in like manner 
shall it be done if the two arbitrators fail to agree upon the choice of an umpire at the re- 
quest of the party making the motion. The cost of appraisement made by the arbitrators 
shall be borne in the proportion of one half by each party. The investigation of damages, 
whether by direct adjustment between the party insured and the Company, or by the inter- 
mediacy of arbitrators, shall only apply to fixing the amount of such damage, without preju- 
dice to the rights of the Company as expressed in the Policy. During the time that such 
damage remains undetermined, the party insured shall make no change in the disposition of 
the damaged goods or premises other than that which may be necessary for the due preser- 
vation of the same. 

Art. 14. Buildings shall be valued according to the combined worth of their materials and 
cost of erection, taking into consideration their age and condition, and any special cause of 
depreciation in value. The ground lot and the advantages of location, improvements, specu- 
lative value or fancy value shall not be considered in making a valuation ; merchandise, raw 
materials, produce, and live stock shall be appraised at the current prices in accordance with 
their quality and condition ; machinery and manufacturing apparatus at first cost, with de- 
duction for depreciation in value on account of age, use, change of system or stagnation of 
such branch of industry ; dry goods, household furniture, and all other articles at first cost, 
with deduction for decrease in value, owing to age, use, and change of fashion. 

Art. 15. If it shall appear, either in amicable settlement or by the appraisement of ex- 
perts, that the value of the articles insured is less than the amount of the insurance, the 
party insured can only claim indemnification in the sum of such lesser value. But if on the 



486 FORM OP FIRE POLICY. 

contrary, it shall become manifest that, at the time of the fire, the value of the articles in- 
sured by the policy exceeds the amount of the insurance, then the party insured shall be 
considered as his own insurer for such surplus, and in such capacity he shall bear his pro- 
portionate share of the loss. If the property shall be insured in several insurance compa- 
nies and the notification required by Article 6 or 8 sent and approved, then the Company will 
bear its share of the loss in proportion to the other amounts insured and in accordance with 
the conditions of the present policy. In no case shall the Company be liable for more than 
the amount insured and its share of the cost of appraisement. 

Art. 16. The party insured shall not be entitled to require the Company to take either a 
portion or the whole of the goods insured, whether they be damaged or not. The Company, 
on the other hand, shall have the option either of leaving both the damaged and undamaged 
articles in the hands of the party insured, as an equivalent for the ascertained value of the 
eame, or of accepting the same upon allowing such value. The Company shall furthermore 
have the right, both as regards buildings and portable property, to make good all damage by 
replacing the articles insured in kind. 

Akt. 17. All rights and claims for compensation for damages that the party insured may 
have or acquire in case of a fire against persons liable in general and especially against his 
tenants, neighbors, the known or suspected originators of the fire, insurance companies or 
others, upon any legal ground whatsoever, are assigned by virtue of this policy to the Com- 
pany, without the necessity of any other obligation or warranty on the part of the party in- 
sured. The Company will refrain from enforcing these rights against such parties as may 
be insured in the same, with the exception of cases where the damage may be occasioned by 
their gross negligence and fault. The party insured is bound, if the Company shall require 
it, to conform the assignment of the above-mentioned rights, either by a special deed to that 
effect, or in his receipt for indemnification for damages. 

Art. 18. The amount of damage compensation, whether the same be fixed by agreement 
and mutually acceptable valuation or by judicial decision, shall be paid in cash within the 
space of one month thereafter, at the place where the policy was issued, due receipt being 
given therefor. The Company shall not be held to pay interest upon the amount of damages 
until after the expiration of said month, provided that the damages be then still unpaid. If 
the payment of the amount of damages should be prevented by arrest, intervention, opposi- 
tion, or want of evidence on the part of the insured, his heirs and legal representatives, the 
Company shall not be bound to deposit or pay said sum before the removal of such obstacles, 
or be held responsible for such delay in the payment, nor for any amount of interest what- 
soever. The sum insured decreases in case of loss in the same amount as the ascertained 
amount of the damage sustained. Should such damage exceed one half of the amount in- 
sured, then the insurance shall cease from and after the date of the fire. Moreover, when- 
ever a fire takes place or a claim for damages has been made, both the Company and the party 
insured shall have the right to cancel for the future the insurance in question, as well as 
other and all insurance contracts in force between them, by giving a simple notice the one to 
the other to that effect in writing. Should such notice of cancelment emanate from the 
Company, the premiums paid in advance and not due upon policies of several years' date shall 
be repaid to the party insured. 

Abt. 19. When an insured building is subject to a mortgage, the payment of amount of loss 
or damage can only be made for the purpose of reconstruction, so the mortgagee must either 
consent to an unconditional payment or be entitled to receive the same. Should a claim for 
damages made by a party insured on such a building become lost through his own fault, then 
the Company will apply the amount of the damages, unless the policy should have lapsed 
through non-payment of premium, to the satisfaction of said mortgagee upon renouncing his 
claims upon the party insured. 

Art. 20. All claims for damages not made within six months after the date of the fire, 
whether adjusted by mutual agreement in writing or brought before the competent civil 
court in due and proper form by the party insured, shall become null and void at the expira- 
tion of such term by virtue of this insurance contract. 

Art. 21. The Company will appear before the ordinary (not the commercial) court of the 
place where its policy or the renewal receipt belonging thereto may be issued, provided that 
the damage by fire shall occur within the limits of the same State wherein the place whence 
the policy was issued is situated ; otherwise, before the ordinary court of the judicial district 
wherein the fire may occur." 



VALUE OF FIRE INSURANCE. 

Fire Insurance lias come to "be such a commonplace, matter of course tiling, 
that we seldom realize its immense importance. The acquisition of property 
is more heeded than its preservation ; yet we are all dependent, hour by hour, 
day and night, in an important degree, for whatever we are worth, in the way 
of personal goods and chattels, upon the security of Fire Insurance Companies. 
These institutions stand between us and poverty. Assuredly the subject of 
Fire Insurance — its systems, plans, and principles, deserves some occasional 
attention from every citizen who is worth his salt in any shape, either by his 
capital or by his labor. — The Independent. 



LOSSES BY FIRE. 487 



FIRES IN PARIS. 



The last statistical returns of the city of Paris contain a table of the num- 
ber and names of fires which have occurred in the capital from 1840 to 1860 
inclusively. There were in all during these twenty years 5,472 conflagrations, 
exclusive of 23,056 chimneys catching fire. The total damage done amounted 
to 16,457,344f, being an average of 820,000f. per annum in round numbers. 
This sum, large as it is, cannot be compared to the losses experienced in for- 
mer days, before the precautions against such disasters had reached the point 
of perfection at which they now are, and when scarcely any other remedy 
was attempted but that of pulling down the adjacent houses, and parading 
the Holy Sacrament in procession along the streets. The first fire-engine 
came in use in 1699, and a M. Dumourier-Duperrier was appointed Director- 
General of these engines, the number of which was fixed at thirteen. 

RECENT LOSSES BY FIRE. 

The last three years have shown startling statistics as to losses by fire, an 
increase about one hundred per cent, each year over that of the preceding 
one. Mere physical hazards could not cause such results or anything approxi- 
mating to them, and no underwriting skill or intelligence can stay the tide 
of disaster under such a state of affairs, unless radical measures are adopted 
to touch all the different phases of the troubles that are hanging about our 
business. — Report of Com. on Rates, &c, of National Board of Underwriters, 
1868. 

PHILADELPHIA FIRE OPERATIONS. 

Fire Companies in 1865. 

Premiums. Premiums. 



Home 9,242 55 

Jefferson 9,016 40 

County 7,173 34 

Mutual Assurance 7,112 25 

Manufacturers 6,139 87 

Mechanics 6,007 08 

Mutual Fire 5,825 52 

People's (5 mos.). 4,622 98 

United Firemen's 3,826 49 

Republic (2 mos.) 1,598 30 



Franklin $176,435 15 

Enterprise 116,272 68 

Girard 100,797 00 

Fire Association 97,697 65 

American 83,953 63 

Pennsylvania 70,254 25 

Spring Garden 56,473 33 

Equitable 37,540 37 

Philadelphia 25,715 11 

Kensington 21,066 80 

Fame 13,808 76 

Contributionship 10,099 85 1 Total $870,779 36 

FIRES IN NEW-YORK. 

During April, 1868, there were sixty-eight fires and alarms of fires in New- 
York City. There were fourteen incendiary fires and attempts to commit 
that crime, in the following places : One kindling-wood yard, one feed- store, 
one theatre, four tenement-houses, one stable, one cabinet shop, one dwelling, 
one wine and liquor store, one artificial-flowers store, one billiard-table 
dealer's rooms, and one book-store and dwelling. The alleged losses were 
$204,330 ; and the insurances, $974,450. 

TOTAL LOSSES BY FIRES IN UNITED STATES. 

During the first four months of 1867, the losses by fire in the United States 
were $14,408,000, as follows : In January, $4,043,000 ; February, $1,405,000 ; 
March, #2,960,000 ; and April, $3,000,000. 

THE INSURANCE CRISIS. 

The past year has been one of severe trial and disaster in the business of 
Insurance. Some of the companies have failed altogether. Others have been 



488 SAN FRANCISCO COMPANIES. 

compelled to retire before approaching ruin, and the necessity of some reform 
in the mode of doing the business has been forced upon the attention of all. 
The public has learned this not only from the frequent record of destructive 
fires, proving often more disastrous to the insurers than the insured, but per- 
haps even more sensibly from a general advance in the rates demanded for 
insurance. — Mass. Report, 1867. 

UNLIMITED INSURANCE AN ENCOURAGEMENT TO ARSON AND 
INCENDIARISM. 

The practices most fatal to the Companies and most injurious to the inter- 
ests and morals of the community, are the granting of unlimited insurance, 
and premature payment and over-payment of losses. If the losses fell upon 
the capital only, the public as a whole would have less interest in their pre- 
vention ; but an Insurance Company is simply a contrivance for shifting the 
loss of the individual to the shoulders of the many. It is none the less a loss 
because it is so transferred. It must fall and rest somewhere, diminishing by 
just so much productive capital and the common wealth. It is therefore very 
plainly for the interest of the public that the policy of Insurance Companies 
should be such as to prevent losses, and not to offer a premium to fraud. It 
lies at the foundation of sound Insurance that there should remain with the 
insured an interest and motive to protect their own property. There are per- 
sons in every community beyond the need of such an influence ; but the moral 
risk, as affected by the character of the insured, is so difficult to gauge, and 
discrimination on such grounds is so odious, that safety lies only in the ap- 
plication of a general rule. . . . The practice of hurrying the Adjusting 
Agent to the scene of the fire before its embers are fairly cold, with a show 
of asking no questions, and paying the full amount claimed by a draft on 
sight, all of which is heralded in the newspapers, is to be condemned as a 
mere bid for popularity at the expense of duty and sound policy. — Mass. Re- 
port, 1867. 

GOOD OUT OF EVIL. 

For the five years preceding 1865, the cost of transacting the fire insurance 
business in the United States increased from about twenty-six to thirty per 
cent, of the premiums paid in, including, of course, the larger taxes. But the 
taxes would not account for the whole change, and it was discovered that 
throughout the land many unsafe risks were taken at rates disproportionately 
small. The consequence of the Portland fire, which fell with such crushing 
effect upon the insurers of the country, brought about the formation of a " Na- 
tional Board of Underwriters," who undertook to organize local boards, ap- 
point agents, and, by a series of systematic surveys and appointments combine 
the influence of all the insurance companies of the country to fix upon uniform 
rates, and,, as a general thing, to raise all rates — but particularly those in- 
volving peculiar risks. Some of the larger cities have as yet held back from 
this cooperation, but St. Louis, Chicago, New- York, Boston, and most of the 
important ones have come into the arrangement. Two hundred and fifteen 
local boards are working harmoniously together, and although their success 
during this last year, the first of their working, has not been all they expect 
to make it, it has gone far to relieve the heavy pressure of the losses in the 
past six months, and they have no doubt that eventually it will do what no 
individual efforts could ever accomplish — place the insurance capital of the 
country on such a foundation that it may be what it pretends to be, an agent 
of insurance froth loss of fire.— New- York Times, July, 1867. 

SAN FRANCISCO FIRE AND MARINE INSURANCE COMPANIES. 

In no single department of enterprise, perhaps, has San Francisco witnessed 
such rapid progress as in the business of local underwriting. Prior to 1861, 
the field was occupied exclusively by Eastern and Foreign Companies. Now 



FRAUDULENT INSURANCE. 489 

we have eleven local Fire and Marine Insurance Companies, whose aggregate 
authorized capital amounts to $5,700,000, of which $4,762,155 has been paid 
up in gold coin. Of these eleven Companies, two are confined strictly to Fire 
Insurance and two to Marine Insurance, the remainder issuing both Fire and 
Marine policies. Following is a list of these Companies, in the order of their 
incorporation, together with the amount of present authorized capital : 

When Incorporated. Capital. 

California Marine Feb., 1861, $200,000 

San Francisco Fire March, 1861, 300,000 

Merchants' Mutual Marine April, 1863, 500,000 

Firemen's Fund Fire and Marine May, 1863, 500,000 

Pacific Fire and Marine July, 1863, 1,000,000 

Home Mutual Fire and Marine Sept., 1864, 1,000,000 

Union Fire and Marine April, 1865, 750,000 

Occidental Fire July, 1865, 300,000 

National Fire and Marine Feb., 1866, 1,000,000 

Builders' Fire and Marine Sept., 1866, 50,000 

People's Fire and Marine Oct., 1867, 100,000 

Total $5,700,000 

The receipts for the year 1867 exceeded the disbursements by $144,284 ; 
the total number of risks written during the year amounted to $121,834,540 ; 
the amount of risks outstanding on the 31st of December was $77,231,465 ; 
the net cash premiums received amounted to $1,707,555 ; the losses paid 
reached $1,076,873 ; liabilities incurred (mainly for losses in course of settle- 
ment) $86,797 — leaving a surplus over premiums of $543,885 ; and the divi- 
dends disbursed were at the rate of thirteen per cent, per annum on the ac- 
tual capital paid up in gold. — San Francisco Evening Bulletin. 

FRAUDULENT INSURANCE. 

The least agreeable of the duties of the Commissioner, is that of enforcing 
the statutes for the prevention and punishment of insurance in fraud of law. 
It would be more astonishing to find in a business commanding its full share 
of talent, integrity, and honor, men quite devoid of the last two qualities, to 
say nothing of the first, if the same thing were not true of other professions 
and pursuits. The ranks of the insurance profession grade down from the 
best types of character and capacity, through all the degrees of humbug and 
knavery — fortunately in a descending series. There are men unscrupulous 
enough to take, in violation of law, premiums for insurance which at the best is 
hardly worth the paper it is written on, and then cheat the company out of 
the money of which they have robbed the insured. Innocent people have sup- 
posed themselves securely protected, while the premium had never got beyond 
the pocket of the agent or broker, and in a double sense they were never in- 
sured at all. 

Ninety-nine one-hundredths of all the insurance done in contravention of 
law, is done by companies that not only have not been, but could not be, ad- 
mitted and recognized as sound companies. No honest agent cares to do this 
contraband business ; and no responsible agent will dare to, because he makes 
himself personally liable on every policy he delivers or transmits. Assuming 
the company to be solvent, the insured is obliged to go out of the State to 
pursue his remedies in case of loss, at a cost and inconvenience which make 
his insurance of little value. 

There are States of respectable traditions, much nearer the Atlantic than 
the Mississippi, whose founders are reputed to have been honest and benevo- 
lent men, that would confer a substantial benefit on the people of Massachu- 
setts, if not on their own, by establishing insurance departments to squelch 
out companies that are an offence to the nostrils of honest and legitimate 
underwriting. 



490 MORAL HAZARD OF FIRE INSURANCE. 

It is tlie imperative duty of the Commissioner, first, to protect the public 
against the impositions of companies and agents of this sort ; second, to protect 
companies and agents complying in good faith with our statutes against an 
unscrupulous and demoralizing competition ; and third, to protect the trea- 
sury of the Commonwealth against a species of smuggling. In that view, 
prosecutions have been, and will, on occasion, be instituted. 

John E. Sanford, 
Insurance Commissioner of Mass., Report for 1868. 

CALIFORNIA INSURANCE LAW. 

The new insurance law of California contains the following regulations con- 
cerning the declaration and payment of dividends : 

No corporation, company, association, or person, now or hereafter transact- 
ing fire, marine, or inland insurance business under the laws of this State, shall 
make any dividends, except from profits remaining on hand after retaining un- 
impaired — 

1. The entire subscribed capital ; 

2. All the premiums received or receivable on outstanding marine or inland 
risks, except marine time risks ; 

3. A fund equal to one-half the amount of all premiums on fire risks and 
marine time risks not terminated at the time of making such dividend ; 

4. A sum sufficient to pay all losses reported, or in course of settlement, and 
all liabilities for expenses and taxes. 

No fire, marine, or inland insurance company or association, organized 
under the laws of the State, or doing business in the State, with a subscribed 
capital of less than one hundred thousand dollars, shall hereafter declare any 
dividends, except from profits remaining on and after reserving — 

1. A sum necessary to form, with the subscribed capital stock, the aggre- 
gate sum of two hundred thousand dollars ; 

2. All the premiums received or receivable on outstanding marine and in- 
land risks, except marine time risks ; 

3. A fund equal to one-half the amount of all premiums on fire risks and 
marine time risks, not terminated at the time of making such dividend ; 

4. A sum sufficient to pay all losses reported, or in course of settlement, and 
all liabilities for expenses and taxes. 

The law further provides that every stockholder receiving a dividend, de- 
clared contrary to these requirements, shall be liable to the creditors of the 
company declaring or paying the same, for the amount of dividend so re- 
ceived. 

It is almost superfluous to pass any commentary upon the wisdom of this 
law. We wish we could impress upon the legislators of every State in the 
Union the importance of enacting precisely such a law, instead of confining 
their legislation on the subject of insurance to the imposition of grossly 
outrageous, illiberal, and unlawful fines, fees, and penalties. — The Spectator. 

THE MORAL HAZARD OF FIRE INSURANCE. 

The Reports of both the Massachusetts and New- York Insurance Depart- 
ments furnish statistical confirmation of what, without it, was only too pain- 
fully evident, that neither the general advance of rates, nor those other refor- 
matory measures which the imminency of their danger has forced upon the 
Fire Insurance Companies, have availed to protect the community against in- 
ordinate and unwarrantable loss from the ravages of fire. True, to the Com- 
panies themselves the business has been made more profitable, or rather, less 
disastrous. Immunity for the individual has cost more, but this additional 
cost has not purchased additional protection for the community. More has 
been paid to reimburse the loser, but nothing has been done, effectually, to 
prevent the loss. It may be said, and truly, that the intent of Fire Insurance 



INVENTIONS FOR EXTINGUISHING FIRES. 491 

is only this — indemnity to the loser, and not security against the loss But 
we believe that the time is fully come in the history of Fire Insurance, when 
something more is demanded ; when the public have a right to ask it, and 
when the best interests, if not the very existence, of the Companies them- 
selves, require them to concede it. Individual Companies contract with their 
patrons to indemnify them against loss by fire, and, beyond this, nothing. 
But do not the great fraternity of Companies, by their acceptance of the im- 
mense franchise put into their hands, tacitly contract with the great body of 
their patrons — that is, the public — so to conduct the business of Fire Insu- 
rance that it shall not, at least, offer a premium for crime ? Without such con- 
tract and its implied responsibility, is there not a moral hazard incurred by 
the community, in entrusting them with so much wealth and power ? May 
not the very indemnity they secure to the individual be purchased and be- 
stowed at the cost of the people ? — Insurance Chronicle, Chicago. 

INSURANCE STATISTICS OF WISCONSIN FOR 1867. 

The Secretary of State of the State of Wisconsin has compiled a tabular 
statement of Fire and Marine and Live Stock Insurance Companies doing busi- 
ness in that State, for the year ending December 31st, 1867. 

By this statement, it appears that there were 64 Fire and Fire and Marine 
Companies of other States doing business in Wisconsin during 1867, repre- 
senting an aggregate capital of $63,144,509. The total amount of receipts of 
these Companies in that State was $1,166,910; and total losses, $698,331. 
There were two Live Stock Companies doing business there for the same time, 
and their receipts were $18,462 ; and losses, $6,307. The Home Companies are 
nine in number, with an aggregate capital of $2,425,161. Their receipts for 
the year were $582,907 ; and losses, $78,616. 

THE OHIO INSURANCE REPORT. 

This consists merely of the collected reports of the Insurance Companies, as 
returned to the Auditor under the law, published in book form as he received 
them, and without any attempt to arrange the results in tabular form. 

According to these statements, the most that can be definitely ascertained is, 
that this State has 65 Stock Fire Insurance Companies, with an aggregate paid- 
up capital of $4,559,238.60 ; 15 Mutual Fire Insurance Companies, with com- 
bined assets of $3,150,841 ; 4 Life Insurance Companies, and 1 Mutual Health 
Insurance Company. The receipts of the new Insurance Department were 
$14,594.50 ; the expenditures, $2,311.44. There are 49 Fire Insurance Com- 
panies of other States doing business in Ohio, and they received, in 1867, 
$1,270,078 in premiums, and paid, for losses, $778,782.08. 

The exact ratio of losses to premium receipts are not shown, as the returns 
only exhibit the net amount of cash actually received, including all accounts 
and bills receivable. 

INVENTIONS FOR EXTINGUISHING INCIPIENT FIRES. 

1734. M. Tuches, a German physician, by throwing balls into the fire, 
containing certain preparations which burst with violence, instantly quenched 
the flames. 

1761. Zachary Grey used the same process, in which were alum, sal am- 
moniac, and other saline matters, with water. 

1761. In the same year Dr. Godfrey, in a public exhibition in a house 
erected for that purpose near Marylebone, applied the like ingredients, with 
great success, by the action of confined gunpowder only, which, exploding, 
dispersed the solution on the materials in combustion, and effectively extin- 
guished the same. 

1792. M. Von Alien, at Stockholm, made numerous public experiments, to 
show the effects of several combined ingredients to render materials entirely 
incombustible. He is stated to have subdued an artificial fire by two men 



492 AMERICAN INSURANCE COMPANIES IN THE DOMINION. 

and forty measures of preparation, that would have required 20 men and 1,500 
of the same measures of simple water. In the same year M. Nil Mosliien 
made many public exhibitions to confirm that combustible materials could be 
made perfectly incombustible, as also did Mr. W. Knox, of Gottenburg. 

1813. Captain G-. W. Manby, F.R.S., " The Shipwrecked Mariner's Friend," 
invented a small, portable machine charged with a seidlitz compound, the 
vessel made perfectly air-tight, and capable of bearing a pressure of 200 lbs. 
to the square inch. The liquid containing the carbon effectually extinguished 
fires in buildings saturated with tar, oils, and naphtha. The mahine was put 
into a leathern case with a strap, and slung over the shoulders of the bearer. 
It was thus conveyed easily where access was difficult ; by means of a short 
length of hose with nozzle attached, the liquid was directed on the fire with 
the utmost precision. 

More recent inventions give promise of success far beyond what was ever 
before attained. 

UNIFORM FIRE POLICIES COMPULSORY. 

The following act was passed by the Connecticut Legislature 
in 1867: 

Sec. 1. That all policies of insurance issued by Fire Insurance Companies 
of this State, after the 30th day of September next, shall contain, in the 
printed forms annexed, uniform conditions as to the risks on which the insu- 
rance is based, said conditions to be approved by the General Insurance Com- 
missioner of the State, and no conditions except those so approved, not writ- 
ten in full in the body of the policy, shall be valid. 

Sec. 2. No foreign Fire Insurance Company doing business in this State 
shall issue policies to citizens thereof, embodying printed conditions, not con- 
tained in the forms authorized by said commissioner for policies of companies 
incorporated in this State. 

Sec. 3. Any Insurance Company or agent thereof, violating any of the pro- 
visions of this act, shall be liable to a penalty equal to double the amount of 
premium charged on the risk on which policy is issued. 

AMERICAN INSURANCE COMPANIES IN THE DOMINION. 

By a recent act of the Dominion Parliament, every insurance company do- 
ing business in Canada is obliged to take out a license from the Minister of 
Finance ; to obtain this license, it will be necessary to deposit with the Re- 
ceiver-General a sum of not less than $50,000 in gold, or British, Canadian, or 
United States stocks, equivalent thereto. One clause provides that — 

" The deposit to be so made shall be by every life, fire, inland, marine, gua- 
rantee or accident insurance company, a sum of not less than $50,000. Such 
sum shall be deposited before the license is issued, except only in the case of 
companies incorporated before the passing of this act, by act of the Parliament 
of Canada, or of the Legislatures of any of the late Provinces of Canada — 
Lower Canada, Upper Canada, Nova Scotia or New-Brunswick, and carrying on 
a business of fire insurance, or inland marine insurance, or both, but no other ; 
which companies may make such deposit in equal annual instalments, the 
first of which shall be paid before the issue of the license ; provided that any 
fire insurance company, limited by its charter as to the amount of its risks, 
need not deposit in all more than two and a half per cent, on the amount held 
at risk at the date of its then last annual return, and may deposit such 
amount in three annual instalments, as aforesaid." 

Another clause requires that when a company carries on more than one de- 
scription of business, it shall make a separate deposit for each branch of its 
business. Thus, if one of our companies does a life and fire business in the 
Dominion, it must deposit $100,000, being $50,000 for each branch of its busi- 
ness. The act also requires that every company shall have at least $100,000 
of paid-up and " unimpaired " capital. 



DANGERS OF FIRE INSURANCE. 493 



PHYSICAL AND MORAL CAUSES OP FIRES. 

The adjustment of a proper rate of premium for all species of hazard on 
each thousand dollars of the risk carried for a year, is a great public desidera- 
tum. It is fundamentally essential that this rate should be adequate to pay 
the losses on its own class of risks, with a fair margin or loading- for expenses 
and profit to stockholders. To the extent that hazards can be accurately 
classed and truly rated, will the business assume a scientific character, and 
reach a sound and solid foundation for enduring success and prosperity. The 
accomplishment of this purpose can be best promoted by a general collection 
and compilation of the private information and experience of the individual 
companies, by an able committee of experts working for the common advan- 
tage of the company and the public. Certain classes of risks are now written 
by the companies under the pressure of necessity, with an imperfect know- 
ledge that a resulting loss to them is almost entirely certain ; other hazards 
are taken, upon which there is a moral conviction of the absolute certainty of 
resulting profit. Rates should be so delicately and scientifically adjusted, 
that each dollar of premium would, on the average, bear an equal peril on 
whatever class of hazard it might be received, in the same manner as life in- 
surance, where, although rates vary at different ages, the pressure of death is 
the same on each dollar of premium. If parties could feel, in paying for fire 
insurance, that the rate was not above the true standard for the hazard car- 
ried, business would be increased and facilitated, and underwriters could act 
more intelligently and decisively, and not so readily yield to the temptation 
of iwicfe?*- writing. 

The National or State Board of Fire Underwriters should take the incipi- 
ent steps toward the permanent establishment of standard rates based on a 
thorough, painstaking, and scientific examination of facts and statistics which 
should be unreservedly given up from private hoarding to the common weal. 

It is but due to the National Board of Fire Underwriters fairly and fully 
to acknowledge that their organization was not inspired by a desire for mono- 
poly or a disposition to weaken or destroy the great commercial and industrial 
interests of the country ; the measures adopted for an increase of rates had 
become simply a matter of self-preservation of the companies, primarily for 
the stockholders, ultimately for the public good. The only just criticism 
which can be made upon their action, is in reference to the correct and true 
adj ustment of rates as between different classes of hazard. A detached dwel- 
ling or farm-house occupied by a careful owner, ought not to pay for the 
losses of theatres or saloons, powder-houses or petroleum refineries. 

The actuarial work of collecting and arranging the statistics of fires in all 
sections of the country, and adjusting a net rate of premium adequate to pro- 
vide a fund to meet the losses, is not the only object of these investigations ; 
an analytic and scientific inquiry should be made, not only as to the actual his- 
toric facts, but as to their physical and moral causes. Take the single case of 
spontaneous combustion — how many agents and policy-holders have the re- 
quisite knowledge to prevent and avoid fires of this nature ? The inventive 
genius and multiplied resources of modern times are vastly increasing, also, 
-the number of incendiary articles ; coal-oils in all their varied forms, nitro- 
glycerine and other new articles of commerce, demand constant study, care 
and watchfulness. Many fires are doubtless caused by the violation of the 
plainest principles governing the storage and use of these articles, and it may 
be questioned whether it is not much cheaper for the companies to collect and 
disseminate information on these subjects than simply to charge excessive 
premiums in order to pay excessive losses. — Superintendent Barnes's Report, 
1868. 

DANGERS AND SAFETY OF FIRE INSURANCE. 

It should never be forgotten that insurance against fire has its dangers as 
well as its safety. The less insurance the fewer conflagrations. The less 
forcing there is in the system of getting business, the fewer uninsurable people 



494 VALUABLE FIRE STATISTICS. 

or risks will get insured. In no interest of civilization, perhaps, is there more 
need of something new than in the insurance of our combustible property 
against fire. There is very little reason in rejecting a scheme of improve- 
ment simply because it is new or untried. The guarantee should be of the 
best quality, so far as it goes, but there ought to be far better safeguards 
against over-insurance. Fully insured men have too little motive to careful- 
ness against fire, and it may fairly be suspected that the public suffers more 
from them than from all the burglars. The stock offices, on the whole, suf- 
fer very little from this cause, for fires raise rates as certainly as the moon 
does the tides. Though at common law over-insurance voids the policy, no 
insurance officer of experience will pretend to deny that claims are often' paid 
where it is reasonably suspected, rather than peril the credit of the company 
by contesting them. In regard to mutual fire insurance companies, over-in- 
surance is guarded against by statute, every proprietor being required te 
bear one-fourth of the risk of a total loss himself. Another safeguard is the 
interest every policy-holder has in the company as a coproprietor. If this 
does not prevent him from getting himself over-insured, it tends strongly to 
open his eyes and ears, and loosen his tongue against the over-insurance of 
his neighbors in the same company. — Mass. B&port, 1866. 

A GOOD EIRE UNDERWRITER. 

It requires years of training to make a good underwriter. He should be a 
good judge of character ; something of a physiognomist — though in these 
days when brokers so much intervene, there is not much chance to use such 
knowledge. He should be a housekeeper in theory, and better if he be so in 
practice ; he should be a cabinet-maker and upholsterer, so far as to judge 
between a good and a poor article ; a builder, so far as to form estimates of 
value and damage ; a merchant, in having a general knowledge of most kinds 
of merchandise and their market values ; a book-keeper and accountant, to ex- 
amine accounts and statements, and thus properly adjust losses; and a com- 
mon sense lawyer, to look into a variety of contracts and stipulations that may 
come up in the way of business, and to understand the law governing con- 
tracts of insurance. Last, but not least, he is supposed to be governed in part 
by past experience in making a proper charge of premium for risks offered, to 
judge sometimes on prevailing winds as they might affect risks in certain 
localities, to look understandingly upon the internal arrangements and the 
external surroundings, and to inquire generally into the ordinary means for 
arresting a fire should it break out. 



RECENT VALUABLE FIRE STATISTICS. 

RELATIVE STANDING OF NEW-YORK COMPANIES. 

The following statistics from the official report of the Superin- 
tendent of the New-York State Insurance Department, for the 
year ending December 31st, 1867, are of great value in ascertain- 
ing the exact present condition of insurance in America. In 
other respects, also, they are of very great convenience and im- 
portance. 

On succeeding pages will be found the Text Tables arranged together for 
all the Fire Insurance Companies doing business in this State, showing their 
relative rank according to the five standards following : 

1. Amount of capital and scrip unimpaired. 

2. Net assets held for the protection of policy-holders. 



TABLES. 



495 



3. Largest amount of premiums during the year. 

4. Least per centage of losses during the year. 

5. Largest per centage of assets to outstanding risks. 

The first Table now includes the amount of outstanding scrip issued by the 
participating Companies, as this fund constitutes practical capital to the in- 
suring public ; all impairments of either capital or scrip are excluded from 
the Table, as such deficiencies do not furnish security to the policy-holder. 

The second Table of net assets held for the protection of the insured, now 
includes the reinsurance fund, as this liability is available for the payment 
of losses during the continuance in business of any Company. 



FIEST TABLE, 

Showing the relative standing of the New-York State Joint-Stock Fire Insurance Companies on 
the 31st day of December, 1867, on the basis of the largest amounts of their respective Capi- 
tals, including Scrip, and excluding all impairments of Capital or Scrip. 



a j Name of Company. 


Capital and 
Scrip. 


o 


Name of Company. 


Capital and 
Scrip. 


u 


Name of Company. 


Capital and 
Scrip. 




$2,000,000 00 
1,074,137 52 

1,000,000 00 
1,000,000 00 
1,000,000 00 

943,185 13 
608,834 00 
509,480 11 

500,000 00 
500,000 00 
500,000 00 
500,000 00 
500,000 00 

483,335 00 1 
416,355 00 
400,000 00 
400,000 00 

385,101 97: 
351,173 05 
350,000 00 : 
304,222 50 

300,000 00 

300,000 00, 
300,000 00 
300,000 00 
300,000 00 
300,000 00: 
300,000 00 ! 
300,000 00: 
300,000 00 ! 
300,000 00 

280,000 00 

250,000 00 
250,000 00! 


17 


Clinton 


$250,000 00 
250,000 00 
250,000 00 
250,000 00 

236,005 48 
210,000 00 
210,000 00 
206,672 00 
204,000 00 
200,010 00 

200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 


23. 

if- 

2.5. 

26. 
27. 
28. 
29. 
29. 
29. 
29. 
29. 
29. 
29. 
29. 
29. 
29. 
29. 
29. 
29. 

! 30. 
31. 


Stuyvesant 

Guardian 

Beekman 

Grocers' 

Baltic 

Brooklyn 

Albany 

Fireman'sTrust 
Hamilton 


$200,000 00 

198,456 63 
192.588 54 

187.065 84 
180,285 43 
153,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 
150,000 00 

147.066 03 
144,613 77 
134.011 12 
127,448 06 
124,836 62 
123,101 59 
104,256 93 

100,000 00 
100,000 00 

100,000 00 

100,000 00 
100,000 00 
100,000 00 

95,099 42 
50,000 00 


2. Continental — 

3. Lorillard 

3. Niagara 

3. Phoenix 

4. Security 

5. Washington. . . . 

6. International . . . 

7. Germania 

7. Howard 

7. Manhattan 

7. N'th-American . 
7. Yonkers&N.Y. 

S. American 

9. Republic 

10. Commerce 

10. Hanover 

11. Corn Exchange . 

12. Market 

13. North River 

14. Mutual, Buffalo. 


17. 
17. 
17. 

18. 
19. 

19. 
•20. 
21. 

22. 

23. 
23. 
23. 
23. 
23. 
23. 
23. 
23. 
23. 
23. 
23 


Commonwealth. 
United States . . 
Williamsb'h C'y 

Franklin 

City 


N.Y. Equitable. 

Long Island 

Firemen's 

Jefferson 

Adriatic 

Albany City.... 
Am. Exchange . 

Broadway 

Buffalo City.... 

Capital City 

Commerce Fire. 

Commercial 

Empire City 

Excelsior 

Fulton 


Kings County. . 


Mechanics' 

Montauk 

Nassau 

People's 

Peter Cooper. . . 

St. Nicholas 

Tradesmen's . . . 

Gallatin 

Hoffman 


23. 
23. 
23. 
23. 
23. 


Gebhard 

Glens Falls 

Globe 

Greenwich 


32. Exchange 

33. Resolute 

34. Lafayette 

35. Firemen's Fund 

36. Northwestern. . 

37. ' Agricultural. . . 

37. Buffalo German 
37. Farmers' Joint- 

1 ! Stock 

37. Holland Pur- 

1 i chase 

37. N. Y. Central.. 
37. Watertown .... 


15. Atlantic 

15. Citizens 1 

15. Columbia 


23. Imp. & Traders' 

23. Irving 

23. Mec. & Traders' 

23. Mercantile 

23. Merchants' 




15. Metropolitan. . . 
15. N'w-Amsterd'm 
15. N. Y. Bowery.. 

15. Western 

16. Knickerbocker. 


23. 

23. 
23. 
23. 
23. 
23. 
23. 
23. 
•23 


National 

New- York 


Park 


Relief 


Rutgers 

Standard 

Star 


38. 

39. 


St. Mark's 

Schenectady . . . 


17. Astor. . . .' 


Sterling 




Total (108compan's) 


$30,484,341 74 











496 



TABLES. 



FIRST TABLE. (Continued.) 

Showing the relative standing of the Mutual Fire Insurance Companies of this State on 
the 31st day of December, 1857, on the hasis of the largest amount of their respective 
Capitals as Mutual Companies. 



.5 
5 


Name of Company. 


Mutual 
Capital. 


a 
O 

6. 
7. 
8. 
9. 


Name of Company. 


Mutual 
Capital. 


1. 
2. 
3. 

4. 
5. 


Dutchess County Mutual 

Glen Cove Mutual 

Mutual of Albany. 

Westchester Co. Mutual. 
Orange Co. Mutual 


$829,062 13 
343,403 07 
319,522 00 
230,242 99 
204,182 11 


Richmond Co. Mutual . . . 

Suffolk Co. Mutual 

Franklin Co. Mutual 

Huntington Mutual 

Total (9 companies) . . . 


$181,160 56 

177,785 05 

16,820 94 

15,834 64 

$2,318,013 49 



FIRST TABLE. (Continued.) 

Showing the relative standing of the Fire and Fire-Marine Insurance Companies of other 
States and Foreign countries on the 31st day of December, 1867, on the basis of the 
largest amount of their respective Capitals, including Scrip, and excluding all im- 
pairments of Capital or Scrip. 



Name of Company. 



^Etna, Ct 

Hartford, Ct. 
Home, Ct 



Phoenix, Ct. 



Merchants', Mass 

Ins. Co. of N. A., Pa. 
Springfield, Mass 



1ST. E. Mutual, Mass . 
Merchants', 111 



Narragansett, R. I 
Putnam, Ct 



American, Pa.. 
Franklin, Pa. .. 
Manufacturers ' , 
Pennsylvania, Pa, 



American, Mass 

Eliot, Mass 

Independent, 
National, Mass 



Hide & Leather, Mass. 

Lumbermen's, 111 

North- American, Ct. .. 



Capital 
and Scrip. 



$2,955,904 53 
1,000,000 00 



600,000 00 

500,000 00 
500,000 00 
500,000 00 

483,718 04 
450,000 00 

406,123 62 
405,199 42 

400,000 00 
400,000 00 
400,000 00 
400,000 00 

300,000 00 
300,000 00 
300,000 00 
300,000 00 

294,669 88 
291,181 03 
260,914 44 



Name of Company. 



Norwich, Ct 
City,Ct 



Atlantic, R. I 

Cleveland, Ohio 

Connecticut, Ct 

Equitable, R. I 

GirardF., Pa 

Ins. Co. State of Pa.... 

Maryland, Md 

Merchants', Ct 

Merchants', R. I 

North- American, Mass . 

People's, Mass . 

Prov. Wash., R. I 

Sun, Ohio 



U. S. Fire & M., Md.... 

Enterprise, Ohio 

American, R. I 

Charter Oak, Ct 

Hope, R. I 

Roger Williams, R I 

Total (43 companies). .. 

Mutual Companies. 
Commercial Mutual, O . . 



Capital 
and Scrip. 



$251,368 36 
247,313 64 

200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 
200,000 00 

198,666 69 
171,382 69 
150,000 00 
150,000 00 
129,478 83 
100,000 00 



$16,342,513 76 



$286,398 10 



Foreign Companies, December 31, 1866. 

1. Liverpool and London and Globe, Liverpool, England $1,896,079 68 

2. Royal Insurance Company, Liverpool, England 1,395,589 80 

3. North British and Mercantile, Edinburgh, Scotland 1,216,666 66 

4. Queen Lnsurance Company, Liverpool, England 924,304 48 



Total (4 companies) $5,432,640 62 



TABLES. 



497 



SECOND TABLE, 

Showing the relative standing of the New- York State Joint-Stock Fire Insurance Companies on 
the hasis of the largest amount of Net Assets (including Capital, Scrip, Surplus, and Rein- 
surance fund) held by them for the protection of policy-holders on the 31st day of December, 
1857. 



Name of Company. 



Home 

Continental 

Lorillard 

Phoenix 

Security 

Niagara 

Manhattan 

International. . . 

Germania 

Washington 

Yonkers&N.Y. 

Howard 

N'th- American. 

American 

Republic 

Hanover 

Western 

Commerce 

Citizens' 

Lamar 

Eagle 

Market 

Corn Exchange. 

Atlantic 

N. Y. Bowery . . 
Mutual, Buffalo. 

North River 

N'w- Amsterdam 
Glens Falls.. 
Williamsb'h C'y 

^Etna 

City 

United States... 

Columbia 

Knickerbocker. 
Metropolitan.. . 
Merchants' 



$3,516, 

1,721. 

1,478, 

1,455, 

1,377 

1,300 

957, 

901, 

819, 

725. 

708, 

674. 

658; 

637. 

600. 

556; 

551, 

550. 

545, 

502, 



479 
462. 
455 
449 
426 
42-2 
414 
412 
408 
400 
3S7 
3S7 
3S4 
371 



406 23 
150 15 
365 86 
460 93 
050 41 
509 33 
479 03 
805 92 
040 50 
777 92 
853 31 
548 60 
109 21 
034 47 
755 93 
490 43 
224 30 
045 16 
963 72 
513 71 
507 83 
,160 15 
763 12 
194 67 
062 83 
,627 17 
076 94 
295 88 
,234 28 
839 15 
,663 72; 
,506 97 
,372 17 
,350 56 
,943 51 
,369 68 
,178 69 



Name of Company. 



Astor 

Agricultural 

Commonwealth 

Firemen's 

Pacific 

Greenwich 

N.Y. Equitable. 

Clinton 

Mec. & Traders' 

New- York 

Long Island 

Standard 

Excelsior 

Arctic 

Broadway 

Irving 

Nassau 

Albany City 

Brooklyn 

Jefferson 

Rutgers 

Empire City 

Fulton 

Tradesmens'. . 

Commercial 

Stuyvesant 

Relief 

Park 

Globe 

Gebhard 

National 

Star u 

Humboldt 

Mercantile. 

American Ex. . 
Capital City... 
Sterling 



£365,917 

353,076 
349,625 
345,036 
343,086 
340,807 
339,319 
334,639 
329,523 
328,872 
326,437 
324,544 
319,638 
314,483 
307,391 
303,609 
302,691 
300,661 
299,226 
293,186 
292,534 
283,666 
276,055 
272,269 
271,927 
270,226 
267,253 
262,926 
257,449 
255,093 
254,656 
254,349 
253,679 
252,118 
249,498 
246,952 
242,931 



Name of Company. 



00 100. 

091 101. 

68 ! 102. 
64 1 103. 
00 104. 



Buffalo City . . . 
Imp. & Tra... 

Franklin 

Beekman 

Commerce F'e. 
Adriatic 

Baltic 

Albany 

Peter Cooper.. 

Lenox 

Hamilton 

Guardian 

Montauk 

Kings County. 
St. Nicholas... 

Grocers' 

Peoples 

Hope 

Mechanics'... . 
Farmers' Joint 

Stock. ... 
Firem's Trust. 
St. Mark's.... 

Resolute 

Exchange 

Hoffman 

Firemen's F'd. 
N. Y. Central . 

Lafayette 

Gallatin 

Buffalo Germ'n 
Holl'd Purch'e 
Northwestern . 

Watertown 

Schenectady . . 



$240,431 03 
239,950 47 
236,005 48 
235,356 78 
230,960 80 
228,291 18 
226,711 29 
221,663 42 
220,660 20 
218,810 33 
218,728 77 
218,482 53 
212,566 " 
210,504 
206,511 
202,033 10 
200,724 57 
193,448 48 
192,804 64 

185,906 85 
185,757 21 
184,394 72 
183,528 47 
176,015 62 
168,637 20 
168,587 
162,723 61 
156,276 85 
147,066 03 
118,059 62 
113,420 
113,152 81 
101,254 21 
68,621 58 



Aggregate. . . 



$44,690,146 15 



The above Table shows the exact amount which each Company has in hand with 
which to pay losses ; for example, the Home can pay $3,516,406.23 ; the Continental, 
$1,721,150.15, and all the above Companies can pay for any combination of " 
not exceeding $44,690,146.15. 



498 



TABLES. 



SECOND TABLE. (Continued.) 

Showing the relative standing of the New- York State Mutual Fike Insurance Companies 
on the basis of the largest amount of Net Assets (including Notes) held for the pro- 
tection of policy-holders on the 31st day of December, 1867. 



No. 


Name of Company. 


Net Assets. 


No. 


Name of Company. 


Net Assets. 


1. 
2. 
3. 
4. 
5. 
6. 


Dutchess Co. Mutual 

Glen Cove Mutual 

Mutual of Albany 

Westchester Co. Mutual. 

Orange Co. Mutual 

Richmond Co. Mutual. . . 


$829,062 13 
343,403 01 
319,522 00 
230,242 99 
204,182 11 
181,160 56 


7. 
8. 
9. 


Suffolk Co. Mutual 

Franklin Co. Mutual 

Huntington Mutual 

Total (9 companies) . . . 


$177,785 05 
16,820 94 
15,834 64 

$2,318,013 43 



SECOND TABLE. {Continued.) 

Showing the relative standing of the Fire and Fire-Marine Insurance Companies of other 
States and Foreign Countries on the basis of the largest amount of Net Assets (in- 
cluding Capital, Scrip, Surplus, and Reinsurance) held for the protection of policy- 
holders on the 31st day of December, 1867. 



Name of Company. 



Stock Companies. 

.Etna, Ct 

Ins. Co. N. A., Pa 

Hartford, Ct 

Franklin, Pa 

Home, Ct 

Phoenix, Ct 

Manufacturers 1 , Mass. . 
N. E. Mut. M., Mass... 

Merchants', Mass 

Pennsylvania, Pa 

American, Pa 

Springfield, Mass 

National, Mass 

American, Mass 

Narragansett, R. I 

Eliot, Mass 

Merchants', 111 

Putnam, Ct 

Enterprise, Ohio 

North-American, Mass. 

People's, Mass 

Ins. Co. State of Pa.... 

City, Ct 

North- American, Ct 

U. S. Fire&M.,Md... 
Merchants', Ct 



$4,368,294 74 

1,867,416 46 

1,858,720 56 

1,566,638 94 

1,491,936 29 

1,157,046 81 

1,038,294 08 

844,976 34 

816,699 94 

806,288 59 

783,812 55 

749,061 58 

742,152 91 

712,981 32 

659,035 42 

588,418 29 

567,963 12 

557,742 88 

535,372 78 

519,523 28 

486,466 82 

462,311 10 

427,595 83 

399,999 73 

384,035 87 

376,763 83 



34. 



37. 



Name of Company. 



Independent, Mass 

Girard Fire & M., Pa. 

Prov. Wash., R. I 

Lumberman's, 111 

Merchants', R. I 

Hide & Leather, Mass 

Norwich, Ct 

Connecticut, Ct 

Cleveland, Ohio 

Maryland, Md 

American, R. I 

Atlantic, R. I 

Sun, Ohio 

Equitable, R. I 

Roger Williams, R. I. . 

Charter Oak, Ct 

Hope, R. I 

Total (43 companies) 



Mutual Companies. 
Commercial Mutual, O . 



Net Assets. 



$358,546 73 
348,864 21 
342,586 17 
334,832 18 
323,967 87 

305.149 97 
293,785 83 
291,346 08 
277,509 31 
270,273 27 
255,186 20 
255,159 79 
246,627 06 
241,228 56 

188.150 47 
187,104 22 
169,378 32 



$29,459,246 



$286,398 10 



Foreign Companies, December 31st, 1866. 

1. Liverpool and London and Globe, Liverpool, England $6,565,385 85 

2. North British and Mercantile, Edinburgh, Scotland 3,182,916 62 

3. Royal Insurance Company, Liverpool, England 2,498,063 90 

4. Queen Insurance Company, Liverpool, England 1,292,017 31 

Total (4 companies) $13,538,383 68 



All the English Companies transact a Life business also in connection with 
their Fire underwriting, and their paid-up capitals and surpluses are of course 
pledged also for obligations in their Life and Annuity departments. 



TABLES. 



499 



THIRD TABLE, 

Showing the relative standing of the New-York State Joint-Stock Fire Insurance Companies, on 
the basis of the largest amount of net cash Premiums received by them respectively during 
the calendar year ending December 31st, 1867, including Fire, Marine, and Inland Premiums. 



Name of Company 



1. Home 

2. Security 

3. Phoenix 

4. International. . . 

5. i Manhattan 

Lorillard 

Niagara 

Continental. 

Ger mania 

Western 

N'th-American. 



Yonkers&N.Y. 



Hanover 

Republic 

Albany City 

Corn Exchange. 

17. J Commerce 

18. (Market 

19. Citizens' 

20. Atlantic 

21.lExcelsior 

22.[Williamsb'hC , y 

23. |Astor 

24. Washington 

25. Baltic 

26. (Metropolitan... 

27. (Tradesmen's . . . 
28.|Lamar 

29. [Commonwealth 

30. [Fulton 

31.|Mec.& Traders' 

St. Mark's 

Merchants' 

Howard 

N. Y. Bowery. . 

Firemen's 

Glens Falls .... 



37. 



$2,187,574 
1,693;424 
1,590,427 
1,163,024 
1,032,026 
739,404 
689,713 
678,947 
593,696 
557,190 
484,429 
403,993 
378,356 
364,787 
353,911 
339,846 
313,686 
307,300 
289,765 
281,492 
273,928 
262,806 
261,476 
255,834 
253,009 
225,249 
224,513 
217,382 
212,573 
210,511 
202,316 
199,462 
191,713 
175,943 
172,749 
170,112 
167,844 



55 65 



35 


66. 


95 


67. 


40 


68. 


89 


69. 


20 


70. 


80 


71. 


34 


72. 


71 


73. 


77 


74. 



American . . . 
Standard. . . . 
Greenwich . 

Irving 

N'w-Amsterd'm 

Pacific 

Resolute 

Hope 

Agricultural 

^Etna 

Mutual 

lie 

Relief 

New- York 

Exchange 

Star 

Stuy vesant 

Mechanics' 

Knickerbocker. 

Clinton 

Commercial . . . 
N.Y. Equitable. 

Humboldt 

Beekman 

Empire City 

Rutgers 

Columbia 

Brooklyn 

St. Nicholas 

Firemen's Fund 

Lenox 

Globe 

Park 

Jefferson 

Arctic 



Mercantile. 



$167,534 29 
152,598 61 
151,959 95 
146,236 43 
140,701 96 
136,756 83 
134,440 22 
132,463 05 
131,758 22 
131,163 60 
130,701 16 
124,404 88 
123,351 71 
117,955 85 
114,832 49 
112,739 77 
110,483 79 
108,289 46 
105,111 65 
105,051 56 
103,741 93 
101,551 73 
99,535 39 
98,274 95 
97,795 09 
97,189 63 
96,823 34 
96,363 29 
96,046 13 
95,157 01 
94,427 22 
92,640 15 
92,211 08 
89,168 68 
88,782 48 
88,136 02 
85,205 51 



87. 



97. 



Name of Company 



Hamilton 

Buffalo City... 

City 

Imp.&Trad'rs' 

Peoples 

Am. Exchange. 

Montauk 

Long Island . . . 
N. Y. Central.. 
Kings County . 

Nassau 

Albany 

Broadway 

National 

Guardian 

United States . 

Adriatic 

Hoffman 

North River . . 

Sterling 

Gebhard 

Firem's Trust. 
Capital City . . 
Farmers' Joint 

Stock 

Peter Cooper.. 
Commerce F'e. 

Grocers' 

Buffalo Germ'n 
Northwestern . 

Franklin 

Holl'd Purch'e 
Schenectady . . 

Gallatin 

Watertown — 

Total (108 comp's). 



$84,990 78 
82,628 15 

80.546 65 
77,011 " 
76,880 49 
74,738 84 
73,353 12 
71,844 90 
65,433 67 
65,215 94 
64,429 57 
62,156 46 
61,977 87 
61,666 57 
61,634 
61,472 64 
60,201 75 
59,325 07 
57,909 71 

56.547 69 
56,024 97 
52,301 58 
51,017 07 

49,402 08 
46,313 67 
46,006 87 
36,560 31 
27,513 80 
23,320 08 
17,935 59 
12,141 94 
3,388 25 
1,071 04 



$24,035,970 04 



The Marine and Inland premiums included in the above Table amount to the sum 
of $3,083,919.96, received by twenty-eight different Companies. 



500 



TABLES. 



THIED TABLE. {Continued., 
New- York State Mutual Fire Insurance Companies. 



No 


Name of Company. 


Premiums. 


No. 


Name of Company. 


Premiums. 


1. 

2. 
3. 
4. 
5. 


Westchester Co. Mutual. 

Dutchess Co. Mutual 

Mutual of Albany 

Glen Cove Mutual 

Orange Co. Mutual 


$81,114 04 
42,065 70 
12,589 06 
11,788 46 
8,242 95 


6. 

7. 
8. 
9. 


Eichmond Co. Mutual. . . 

Suffolk Co. Mutual 

Franklin Co. Mutual 

Huntington Mutual 

Total (9 companies). . 


$4,560 80 

4,260 37 

1,043 04 

621 11 


$166,284 53 



THIED TABLE. {Continued.) 
Fire and Fire-Marine Insurance Companies of other States. 



Stock Companies. 

./Etna, Ct 

Home, Ct 

Hartford, Ct 

Ins. Co. of N. A., Pa.... 

Phrenix, Ct 

Enterprise, Ohio 

|N. E. Mut. M., Mass 

Putnam, Ct 

Springfield, Mass 

Narragansett Fire and 

Marine, E. I 

National, Mass 

City, Ct 

North American, Ct 

[Merchants', Ct 

Manufacturers', Mass. .. 

[Merchants', 111 

jPeople's, Mass 

i American, Mass 

Norwich, Ct 

Ilns. Co. State of Pa 

United States, Md 

Merchants', Mass 

Franklin, Pa 

Prov. Wash., E. I 



$3,593,557 91 

1,730,754 12 

1,559,040 09 

1,244,107 95 

1,190,982 21 

781,458 00 

722,569 85 

547,833 50 

475,033 32 

431,130 63 

418,215 49 

385,241 99 

337,953 92 

327,497 51 

319,708 88 

314,532 52 

300,262 58 

240,942 37 

216,258 41 

204,962 27 

187,969 76 

186,538 19 

185,107 17 

180,384 15 



Name of Company. 



Merchants', E. I 

Lumberman's, 111. ..... . 

Connecticut, Ct 

GirardF. and M., Pa... 

Maryland, Md 

American, E. I 

Eliot, Mass 

Atlantic, E. I 

Eoger Williams, E. I. . . 

American, Pa 

Hope, E. I 

Cleveland, Ohio 

North- American, Mass. 

Sun, Ohio 

Pennsylvania, Pa , 

Equitable, E. I 

41. 'Independent, Mass , 

42. Charter Oak, Ct 

Hide & Leather, 



Total (43 companies) 



Mutual Companies. 
Commercial Mutual, O. 



170,313 92 
165,659 96 
158,106 13 
136,903 33 
131,9-55 
131,154 61 
127,145 27 
124,611 53 
115,250 29 
104,193 09 
96,157 32 
89,733 
80,452 
77,388 72 
76,502 95 
55,932 66 
52,208 61 
36,928 80 
11,942 41 



$18,140,089 3-1 



$115,324 98 



FOEEIGN FlBE INSUEANCE COMPANIES FOE THE CALENDAB YeaB 1866. 

1. Liverpool and London and Globe, Liverpool, England. $3,959,389 29 

2. Eoyal Insurance Company, Liverpool, England 2,164,792 14 

3. North-British and Mercantile, Edinburgh, Scotland 1,365,311 77 

4. Queen Insurance Company, Liverpool, England 502,840 91 

Total (4 companies) $7,992,334 11 



The amount of Marine and Inland premiums included in the above Table 
as received by Companies of other States, is $2,998,907.37, which sum was 
received by sixteen of the forty-four Companies. 

The premiums of the JEtna, of Hartford, nearly equal those of the great 
consolidated English Company, the Liverpool, London, and Globe, and ex- 
ceed the premiums of the Royal Insurance Company by more than $1,000,000. 



TABLES. 



501 



FOURTH TABLE, 

Showing the relative standing of New- York State Joint-Stock Fire Insurance Companies, on 
the basis of the least Pee centage op Losses paid to net cash Premiums received for 
the calendar year ending December 31st, 1867. 



Name of Company. 



North River. . . . 

Grocers' 

Broadway 

City 

United States . . 

Howard 

American 

Peter Cooper... 

Merchants 1 

Gebhard 

National 

^Etna 

Long Island 

People's 

Commerce Fire 

Empire City 

Pacific 

Capital City. .. 

Nassau 

St. Nicholas 

Clinton 

N. Y. Bowery.. 

Sterling 

Mercantile 

Mec. & Traders' 

Albany 

Market 

Firemen's. . 

Lamar 

N. Y. Equitable 

Columbia 

Williamsb'h C'y 

Montauk 

Rutgers 

Brooklyn 

Standard 

Tradesmen's... 

Hamilton 

Yonkers&N.Y. 



Per cent 
age of 
Losses 
puid. 



1515 
16-59 
18-94 
23-29 
26-90 
28-46 
29-86 
30 85 
3135 
3167 
31-98 
32-40 
32'53 
33 40 
33 55 
34-26 
3449 
3451 
36-57 
36-71 
36-81 
37 02 
3805 
38-41 
3919 
39-77 
40 03 
40-07 
40-76 
40-81 
41-29 
41-63 
42-20 
42-58 
43-01 
44-98 
45-24 
45-51 
45-56 



Name of Company. 



Irving 

Imp't's&Trad's 

Germania 

Continental 

Astor 

Citizens' 

Greenwich 

Eagle 

Agricultural — 

Glens Falls 

American Ex... 

Niagara 

Commonwealth 
Kings County... 
N. Y. Central . . 

Washington 

Guardian 

N'w-Amsterd'm 

Lorillard 

Park 

Jefferson 

Knickerbocker . 

New- York Fire 

and Marine. . . 

Globe 

Commerce 

Stuyvesant 

Hanover 

Mutual, Buffalo, 

Albany City 

Relief. 

Lenox 

Mechanics' 

Schenectady — 

Fulton 

Star 

Western 

Security 

N'th- American. 



Per cent- 




age of 




Losses 




paid. 




45-72 


78. 


46-23 


79. 


4631 


80. 


46-51 




47-81 


81. 


47-97 


82. 


48-59 


83. 


49-08 


84. 


49-09 


85. 


49-97 


86. 


50-60 


87. 


50-71 


88. 


50-85 


89. 


51-20 


90. 


51-45 


91. 


51-73 


92. 


52-14 


93. 


5223 


94. 


52-83 


95. 


5351 


96. 


5413 


97. 


5567 


98. 




99. 


56-55 


100. 


56-73 


101. 


56-80 


102. 


57-12 


1. 


57-22 


2. 


59 29 


3. 


6058 




6059 


4. 


61-21 




6P46 


5. 


62-26 




63-27 


6. 


63-46 




6391 




64-87 




65 50 





Name of Company. 




Corn Exchange. 

Republic 

Farmers' Joint- 
Stock 

Baltic 

Commercial 

Home 

Firemen' sTrust 

St. Mark's 

Beekman 

Excelsior 

Phoenix 

Firemen's Fund 

Humboldt 

Manhattan 

Hope 

Atlantic 

Adriatic 

International .. 

Exchange 

Hoffman 

Lafayette 

Resolute 

North- Western. 

Arctic 

Metropolitan... 

Gallatin 

Watert'n (new). 

Holl'd Purchase 
(new Co.) 

Franklin (new 
Co.) 

Buffalo German 
(new Co.) 

Buffalo C'y(new 
Co.) 



Average. 



65-89 
66 19 



66-67 
67-40 
67*53 
70-79 
7095 
71-28 
71-66 
73-52 
73-68 
74-37 
78-38 
81-15 
82-29 
8252 
82-62 
89-82 
93 22 
97-50 
128-25 
143-77 
185-38 
315-64 



61-86 



The average per centage of loss to premiums of the New- York Stock Compa- 
nies has been 5865 per cent, on the business of twenty years, showing that the 
year 1867 exceeded an average year in losses. 



502 



TABLES. 



FOUKTH TABLE. {Continued.) 
New- York State Mutual Fire Insurance Companies. 



1 

No. 


Name of Company. 


Per centage 

of Losses 

Paid. 


No 


Name of Company. 


Per centage 

of Losses 

Paid. 


1. 
2. 
3. 
4. 
5. 
6. 




oo-oo 

22-08 
26-73 
35-97 
37-46 
49-20 


7. 
8. 
9. 


Dutchess County Mutual 

Kichmond County Mutual. . . 
Franklin County Mutual — 


57-43 
114-82 
12517 


Westchester County Mutual. 


Suffolk County Mutual 

Orange County Mutual 


37-66 







FOURTH TABLE. {Continued.) 
Fire and Fire-Marine Insurance Companies of other States. 



Name of Company. 



Girard Fire and Marine, Pa 

Sun, Ohio 

North- American, Mass 

Pennsylvania, Pa 

Eliot, Mass 

Cleveland, Ohio 

American, R. I 

American, Pa 

Enterprise, Ohio 

Merchants', Ct 

City, Ct 

Merchants', R. I 

Phoenix, Ct 

Franklin, Pa 

Prov. Washington, R. I. . . . 

Hartford, Ct 

Lumberman's, 111 

Roger Williams, R. I 

Connecticut, Ct 

National, Mass 

People's, Mass. (new) 

Equitable, R. I 

./Etna, Ct 

Merchants', HI 

North -American, Ct 

Hope, R. I 

Springfield, Mass 



Per centage 
of 
Paid. 



27-58 
28-06 
28 61 
29-49 
3256 
38-88 
41-87 
43-38 
46-81 
5217 
54-01 
54-39 
55 95 
55-97 
5631 
5666 
56-71 
56-81 
56-90 
5725 
58-15 
58-17 
58-47 
6112 
61*85 
62-29 



34. 



Name of Company. 



United States, Md — 

Home, Ct 

Ins. Co. of N. A., Pa. 

Atlantic, R. I 

Manufacturers', Mass 
Narragansett, R. I. . . 

Putnam, Ct 

Independent, Mass. . . 
Merchants', Mass. .. . 
N. Eng. Mutual M 

Norwich, Ct 

American, Mass 

Charter Oak, Ct 

Ins. Co. State of Pa 

Hide & Leather, (new) Mass 
Independent, (new) Mass. .. 

Average 



MUTUAL COMPANIES. 

Commercial Mutual, Ohio. 



Per centage 

of Losses 

Paid. 



63 02 
65 75 
66-48 
69-02 
70-82 
73 06 
74-22 
75-77 
8813 
8914 
91-72 
9501 
110-07 
129 99 
2121 
2268 



6214 



4977 



Foreign Fire Insurance Companies, for the Calendar Year 1866. 

1. North British and Mercantile, Edinburgh, Scotland 67-79 

2. Liverpool and London and Globe, Liverpool, England 7678 

3. Royal Insurance Company, Liverpool, England 8482 

4. Queen Insurance Company, Liverpool, England 92-35 



The average losses to premiums of the Companies of other States since 
1860 has been 65 - 59 per cent. ; the year 1867 shows a less ratio, being 62'14 
per cent. 

The ratio of loss to premium of the Foreign Companies, for the year 1866, 
exceeds that of the American Companies for the year 1867 very considerably, 
which cannot probably be accounted for by the changing values and other 
causes incident to our late war. 



TABLES. 



503 



FIFTH TABLE, 

Showing Che relative standing of New- York State Joint-Stock Fire Insurance Companies, 
on the basis of the largest Per centage op Assets held for each $100, of the total 
amount of all Fire, Marine, and Inland risks in force on the 31st day of December, 
1866. 



No. 



1. 
2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 
111. 
11. 
12. 
13. 
14. 
15. 
16. 
17. 
IS. 
19. 
30. 
21. 
■2-2. 
23. 
24. 
25. 
28. 
27. 
28. 
29. 
30. 
31. 
32. 
33. 
34. 
35. 
30. 
37. 
38. 
39. 
40. 



Name of Company 



Commerce Fire. 

Arctic 

Adriatic 

Capital City 

Sterling 

Mutual 

Grocers' 

Gebhard 

North Eiver . . . 

Columbia 

Guardian 

United States. . . 

Howard 

Nassau 

Long Island 

N'w-Amsterd'm 

Hamilton 

Hoffman 

Am. Exchange . 

City 

Lamar 

iEtna 

Eepublic 

Clinton 

Washington 

Imp.&Traders' 

Star 

National 

Niagara 

Rutgers 

Albany 

Empire City 

Mercantile 

Lenox 

Humboldt 

Kings County.. 

Broadway 

American 

Commercial 

Stuy vesant 



Per cent- 
age o( 

Assets to 
Risks. 

5-722 

5-648 

5-483 

5-033 

4-859 

4639 

4-526 

4-476 

4-389 

4-382 

4-229 

4225 

3726 

3-654 

3610 

3 530 

3-528 

3 463 

3415 

3-380 

3 321 

3-286 

3-221 

3-215 

3-132 

3-117 

3-117 

3-111 

2976 

2-976 

2-968 

2-883 

2-880 

2-866 

2-861 

2-826 

2-804 

2-794 

2-714 

2-707 



Name of Company 



People's 

Standard 

Commonwealth 

Hanover 

Knickerbocker. 

Eagle 

Irving 

Globe 

Firem's Trust. . 

Jefferson 

Beekman 

New- York 

Exchange 

Western 

Firemen's 

Commerce 

Firemen's Fu'd 

Hope 

Williamsb'hC'y 

N. Y. Equitable 

Peter Cooper. . . 

St. Nicholas... 

Eelief 

Montauk 

Pacific 

Yonkers& N.Y. 

Phoenix 

Corn Exchange 

Lorillard 

Astor 

Manhattan 

Resolute 

Continental 

Park 

Albany City 

St. Mark's 

Home 

N'th-American. 

Baltic 

Citizens' 



Per cent- 
age of 
Assets to 
Risks. 



2599 
2-595 
2-583 
2-577 
2 558 
2537 
2-472 
2-465 
2432 
2-404 
2-402 
2394 
2 303 
2-299 
2252 
2-206 
2'203 
2-193 
2-158 
2-158 
2-140 
2115 
2-047 
2-024 
2-003 
1-989 
1-987 
1976 
1-967 
1-959 
1-947 
1-898 
1-888 
1-861 
1-853 
1-852 
1-805 
1-786 



Name of Company. 



Greenwich 

N. Y. Bowery 

Metropolitan. . 

Brooklyn 

Excelsior 

Mechanics' 

Mec. & Traders 

Germania 

Atlantic 

Market 

Security 

Lafayette 

International . . 

Merchants' 

Fulton 

Tradesmen's. .. 

Glens Falls . . . 

New- York Cen- 
tral 

Farmers' Joint- 
Stock 

Agricultural 

Franklin (rein- 
sured) 

Gallatin (rein- 
sured) 

Northwestern 
(closing) 

Watertown 
(new) 

Schenectady 

(new) 

Buffalo City 

(new) 

Buffalo German 

(new) 

Holland Pur- 
chase (new) . . 

Average (Com- 
panies comb'd) 



Percent- 


age of 


Assets to 


Risks. 


1-784 


1-781 


1756 


1-708 


1670 


1-660 



1-655 
1631 
1-592 
1568 
1-541 
1-518 
1-499 
1-459 
1-337 
1-310 
1-182 

1146 

0-736 
722 



54-315 
48-992 
20-888 
4-712 
4-517 
4-400 

2-205 



It will be noticed that these Companies hold on the average 
$100 of property insured. 



J.20 for each 



504 



TABLES. 



FIFTH TABLE. (Continued.) 
New-York State Mutual Fire Insurance Companies. 



No. 


Name of Company. 


Per centage 
of Assets 
to Risks. 


No. 


Name of Company. 


Per centage 
of Assets 
to Risks. 


1. 
2. 
3. 
4. 
5. 
6. 




11-260 
9-580 
8-335 
8-180 
5-948 
5-773 


7. 
8. 
9. 


Dutchess County Mutual 

Franklin County Mutual 

Westchester County Mutual. 

Average (Comp's combined). 


3615 

1-725 
1-671 


Richmond County Mutual . . . 
Huntington Mutual 


Suffolk County Mutual 

Glen Cove Mutual 


4-286 


Orange County Mutual 



FIFTH TABLE. (Continued.) 
Fire and Fire-Marine Insurance Companies of other States. 



Name of Company. 



American, Mass 

Equitable, R. I 

Commercial, Ohio 

Charter Oak, F. & M., Ct 

Merchants', Mass 

Eliot, Mass 

North-American, Mass... 

Lumberman' s, 111 

Merchants', 111 

New-England, Mass 

American, R. I 

Cleveland, Ohio 

Sun, Ohio 

United States, Md 

American, Pa 

Pennsylvania, Pa 

Manufacturers', Mass 

Ins. Co. State of Pa...... 

Merchants', R. I 

Ins. Co. of N. A., Pa..... 

Roger Williams, R. I 

Narragansett, R. I 

Atlantic Fire & M., R. I. . 



Per centage 
of Assets 
to Risks. 



5928 
5-914 
5 685 
5 511 
5-097 
4-918 
4-752 
4-393 
4-385 
4-270 
4-165 
3947 
3793 
3-716 
3-713 
3-689 
4-497 
3-414 
3-325 
3-276 
3-199 
3-107 



Name of Company. 



National, Mass 

Hope, R. I 

Prov. Washington, R. I 

Franklin, Pa 

Maryland, Md 

Connecticut, Ct 

iEtna, Ct 

Putnam, Ct 

Girard Fire & Marine, Pa. . . 

Norwich, Ct 

People's, Ct 

Springfield, E. & M., Mass.. 
Enterprise, F. & M., Ohio... 

Home, Ct 

North-American, Ct 

Phoenix, Ct 

City, Ct... 

Merchants', Ct 

Hartford, Ct 

Hide & Leather, (new) Mass. 
Independent, (new) Mass. . . . 

Average (Comp's combined). 



Per centage 
of Assets 
to Risks. 



2-901 
2-899 
2781 
2-501 
2204 
2212 
2170 
2-143 
2-125 
1-941 
1-833 
1-826 
1-773 
1-639 
1-629 
1-550 
1-538 
1-475 
1-444 
14-831 
7-747 



Foreign Fire Insurance Companies. 

1. Liverpool and London and Globe, Liverpool, England 1*893 

2. North British and Mercantile, Edinburgh, Scotland Risks in force not stated. 

3. Queen Insr -ance Company, Liverpool, England 1 814 

4. Royal Insurance Company, Liverpool, England 1 - 229 



With premium correctly adjusted and a line of business large and broad 
enough to secure an average loss, no capital or assets beyond current pre- 
miums would be necessary to guarantee the payment of all losses. A small 
per centage of assets to risks may afford abundant security in certain Com- 
panies, while a large per centage may fail in other cases to prevent insolvency. 
This test of standing should therefore be considered as one element only, in 
determining the relative strength of different companies. 



TABLES. 



505 



TABLE, 

Showing the Kisks written, Premiums received, Losses paid, and various per centages of 
the Fire Insurance Companies of this and other States, for several years, as therein 
stated, embracing their Marine and Inland business only, compiled from their An- 
nual Statements on file in the Insurance Department. 

MARINE AND INLAND INSURANCE BUSINESS. 



Ybae. 


Amount of 
Risks written. 


Amount of 
Premiums 
received. 


Amount of 
Losses paid. 


I s ! 

S g 3 

a. 


o a 

If! 

c | % 


O Jj 09 

«Z 2 


O o 


New- York State Joint-Stock Fire Insurance Companies. 


1860 

1861 

1862 

1863 

1864 

1865.... 
1866. ... 
1867 

Total.. 


$80,379,892 00 
80,351,602 00 
110,949,672 00 
175,942,397 00 
253,714,936 00 
271,588,107 00 
378,880,003 00 
413,215,439 00 


$551,183 25 
666,228 58 
875,835 19 
1,193,714 61 
2,292,820 50 
2,657,131 17 
4,335,305 39 
3,083,919 86 


$405,507 46 

497,073 87 

452,166 00 

839,727 96 

1,542,328 46 

2,020,654 63 

3,800,702 52 

2,675,783 56 


73-57 
74 61 
51-64 
70-35 
67-27 
76-05 
87-67 
86-76 


•5045 
•6186 
•4075 
•4773 
•6079 
•7440 
1-0031 
•6475 


198-22 
16165 
245-37 
209-52 
16450 
134 41 
99-69 
154-43 


•6875 
•8291 
•7343 
■5695 
•9037 
•9784 
1-1442 
•7463 


1,765,022,048 00 


15,656,138 55 


12,233,944 46 


78-14 


•6931 


144-27 


•8870 




Fire Insurance Companies or other St 


4.TES. 






1860 

1861 

1862 

1863 

1864 

1865 

1866 

1867 

Total.. 

Gr. Agg. 


$85,520,046 00 

62,767,118 00 

86,337,417 00 

83,112,549 00 

110,412,530 00 

155,357,694 00 

193,100,917 00 

186,046,125 00 


$1,600,635 83 
1,402,423 58 
1,220,343 44 
1,200,851 20 
1,409,548 71 
1,531,521 61 
2,250,782 12 
2,998,907 37 


$1,049,581 17 

919,421 94 

832,482 94 

824,740 82 

806,937 86 

1,401,762 45 

2,220,242 58 

2,674,672 61 


65-57 
65 56 
68-22 
68-68 
57-25 
91-53 
98-64 
89-19 


1-2273 

1-4648 

•9642 

•9923 

•7308 

•9023 

1-1498 

1-4376 


81-48 
68-27 
103-71 
100-77 
136-83 
110-83 
86-97 
69-56 


1-8716 
2-2343 
1-4132 
1-4448 
1-2766 
'9858 
1-1656 
1-6119 


962,654,396 00 


13,615,013 86 


10,729,842 37 


78-81 


1-1146 


89-72 


1-4143 
1-0731 


2,727,676,444 00 


29,271,152 41 


22,963,786 83 


78-45 


•8419 


118-78 



It is quite evident from this Table, that in order to make any money, a 
Fire Insurance Company engaging in Marine and Inland business, must cal- 
culate to meet with less than the average amount of losses incurred by other 
Fire Insurance Companies engaged in the same line of business. An average 
loss of over 78 per cent, leaves only a small, if any, margin for reserve or 
dividends. The coincidence in the average loss of the New- York State Com- 
panies during the year 1866, of 87'67 per cent., and of 87 - 31 per cent, during 
1867, will attract attention. 



506 



TABLES. 



TABLE, 

Showing the amount of Kisks written, Losses paid and various percentages of the Fere In- 
surance Companies of this and other States for several years as therein stated, em- 
bracing their Fire business only, compiled from their Annual Statements on file in the 
Insurance Department. 

Fire Insurance Business. 



Year. 


Amount of 
Risks written. 


Premiums 
received. 


Amount of 
Losses paid. 


o 

f!| 
ill 

ft. 


o c 

|| % 

ft- tf 


c 


o o 

Pi 
«*!« 


New- York State Joint-Stock Fire Insurance Companies 


1860 


$1,049,551,594 00 
1,027,112,596 00 
1,200,721,130 00 
1,560,687,139 00 
2,342,666,111 00 
2,510,595,187 00 
2,753,493,107 00 
2,503,847,496 00 


$6,710,412 27 

6,161,507 88 

6,866,355 69 

8,987,315 81 

13,325,783 32 

17,052,086 97 

20,786,847 47 

21,012,050 18 


$3,578,934 15 
3,274,115 21 
4,227,157 44 
3,349,945 22 
7,195,271 84 
12,046,793 77 
15,312,751 13 
12,229,492 80 


53.33 
53.14 
61.56 

37.27 
54.00 
70.65 
73.67 
58.20 


•3410 
•3188 
•3521 
•2146 
•3071 
•4799 
•5561 
•4884 


29326 
313-71 

38405 
465-88 
325-58 
208 40 
179-82 
204-74 


•6392 
•5999 
•5738 
-5805 
•5688 
•6792 
•7549 
•8392 


1861 


1862 


1863 


1864 


1865 


1866 


1867 


Total 


14,948,674,360 00 


100,902,359 59 


61,214,461 56 


60.67 -4095 


244-20 


•6750 


Fire Insurance Companies of other States. 


1860 


$567,887,673 00 
502,906,639 00 
529,267,441 00 
589,513,659 00 
823,866,793 00 
917,510,037 00 


$5,156,136 18 
4,365,819 88 
4,442,063 30 
5,032,342 32 
6,815,369 36 
8.367.502 58 


$3,414,696 75 
2,975,574 58 
2,829,574 13 
2,307,030 42 
4,161,353 13 
5,217,824 56 
8,600.994 74 
8,588,777 07 


66.23 
68.16 
63.70 
45.84 
61.06 
62.36 
74.83 
56.69 


•6013 
•5917 
•5346 
•3913 
•5051 


166-31 
169 01 

187-04 
255-53 
197-98 


•9079 

•8681 
•8393 
•8536 
•8272 
•9120 
•9770 
1-1579 


1861 


1862 


1863 


1864 


1865 


•5687 ; 175-84 
•7310 136-79 
■6564 i 152 -34 


1866 


1,176,555,214 00| 11,494,557 29 
1,308,447,412 00 15,150,088 27 


1867 


Total 

Gr. Agg 


6,415,954,868 00 ' 60,823,879 18 


38,095,825 38 


62.63 


•5938 168-42 


94-80 


21,364,629,228 00' 161,726,238 77 

1 


99,310,286 94 


61.41 


•4648 j 215-13 


•7570 



The Fire Insurance business of the American Stock Companies transacting 
business in this State for a period of eight years (1860-1867), covering over 
twenty-one billions of dollars in risks, and over one hundred and sixty-one 
millions of dollars in premiums, indicates a per centage of loss to premium of 
61*41, a ratio of loss to amount of risks written of *4648, upon which the 
average rate charged was *7570, leaving an average margin for expenses and 
profits of only '2922 on each hundred dollars of risks written. 



TABLES. 



507 



No of 
Cos. 



Total Premiums. 



New-York State Joint-Stock Fere Insurance Companies. 



1848 


24 


1849 


24 


1850 


31 


1851 


35 


1852 


43 


1853 


64 


1854 


67 


1855 

1856 


73 


1857 


83 


1858 


86 


1859 


98 


1860 


96 


1861 


95 


1862 


96 


1863 


101 


1864 


107 


1865 


109 


1S66 


104 


1867 


108 


Total 





$1,545,165 85 

1,710,208 22 

1,996,201 66 

2,349,862 72 

2,827,552 43 

3,800,858 77 

4,622,270 59 

5,018,446 6S 

5,570,449 90 

5,961,404 87 

6,046,436 76 

6,299,688 16 

7,261,595 52 

6,827,736 46 

7,742,190 88 

10,181,030 42 

15,618,603 82 

19,709,218 14 

25,122,152 86 

24,095,970 04 



$164,307,044 75 



$1,268,231 86 

928,445 90 

1,211,856 75 

1,144,757 83 

1,520,806 06 

1,732,072 14 

2,722,336 04 

2,101,947 13 

2,554,422 18 

2,817,088 93 

2,239,604 23 

2,681,986 08 

3,984,441 61 

3,771,189 08 

4,679,323 44 

4,189,673 18 

8,737,600 30 

14,067,448 40 

19,113,453 65 

14,905,276 36 



$96,371,961 15 



82-08 
54-29 
60-71 
48-72 
53-78 
45-57 
58-90 
41-88 
45-86 
47-26 
37-04 
42-57 
54-87 
55-23 
60-44 
41-15 
55 94 
71-37 
76-08 
61-86 



58-65 



1848 

1849 

1850 

1851 

1852 

1853 

1854 

1855 

1856 

1857 

1858 

1859 

1860 

1861 

1862 

1863 

1864 

1865 

1866 

1867 

Average. 



New- York State Mutual Fere Insurance Companies. 



1853. 
1854. 
1855. 
1856. 
1857. 
1858. 
1859. 
1860. 
1861. 



1864. 
1865. 
1866. 
1867. 



Total. 



45 



25 



$1,839,489 86 
893,348 26 
469,291 16 
274,515 15 
260,482 50 
226,744 28 
235,184 02 
212,980 12 
190,318 71 
289,243 84 
161,083 13 
128,840 15 
115,523 13 

133.418 29 

175.419 61 



$1,111,387 90 
604,210 91 
272,1:34 56 
180,051 63 
145,152 76 
142,901 21 
139,551 46 
120,486 54 
131,957 49 
216,349 26 
98,675 70 
84,849 73 
66,920 77 
59,961 77 
67,610 52 



60-42 
67 63 
5799 
65-59 
55-72 
63-02 
59-34 
56-57 
6933 
74-80 
61-26 
65-86 
57-93 
44-94 
38-54 



$5,605,882 21 



$3,442,202 21 



61-40 



1853 

1854 

1855 

1856 

1857 

1858 

1859 

1860 

1861 

1862 

1863 

1864 

1S65 

1866 

1867 

Average. 



Fere Insurance Companies op other States. 



1860 


33 


1861 


31 


1862 


32 


1863 


33 


1864 


37 


1865 


36 


1866 


33 


1867 


45 


Total 





Grand Agg. 



$6,756,772 01 
5,768,243 46 
5,662,406 74 
6,233,193 52 
8,224,918 07 
9,899,024 19 
13,745,339 41 
18,148,995 64 



$74,438,893 04 



$244,351,820 00 




$48,825,667 75 



$148,639,831 11 



66-07 
67-52 
64-67 
50-24 
6041 
66-87 
78-73 
62-06 



65-59 



1860 

1861 

1862 

1863 

1864 

1865 

1886 

,..1867 

Average. 

Average. 



508 REMARKS ON TABLES. 

The preceding pages contain the most extensive and reliable statistics of 
the business of Fire Insurance Underwriting ever published in this country. 
The grand aggregate of $244,351,820 in Premiums and $148,639,831.11 in 
Losses shows a per centage of Loss to Premium of 60 - 83 per cent. This ratio, 
however, is not so large as the facts require ; inasmuch as in cases of failures 
and receiverships, the premium income ceases, and outstanding losses are 
often liquidated from capital ; and no statements of such Companies have 
ever been required to be filed in this Department by Receivers prior to the 
Act of 1867 {chap. 709). With premiums adjusted as in the past, the law 
of average loss, demonstrated by experience, is evidently about sixty-one per 
cent, of premium received. In Great Britain, thirty per cent, is not considered 
as an excessive ratio for the total management expenses of a Fire Insurance 
Office. This assumption would leave our American Companies only nine per 
cent, of premium for profits and reserve funds, which margin is subject to re- 
duction also by enhanced expenses and increased taxation during and since 
the war. The stubborn facts which these figures record clearly demonstrate 
that the present rates of fire premium may be adjusted, but not reduced, and 
that then, by a rigid economy of management only, and the adoption of such 
a system of legislation and Fire Insurance practice, as will check the occur- 
rence of so many fires, can a large profit be hereafter realized by the Under- 
writer. The social economist and patriot must deeply mourn the fearful de- 
struction of national wealth and resources which our Fire losses now entail 
upon the country. The realized profits of the Underwriter are not lost to the 
nation ; and this profit can be obtained the most readily by the efficient per- 
formance of the patriotic duty of preventing as well as extinguishing fires. 



CHAPTER III. 

LIFE ASSURANCE. 

NAMES, LOCATION, OFFICEKS, AND DATE OF ORIGIN OF ALL COM- 
PANIES IN THE UNITED STATES. 

The following is an alphabetical list of all the Companies in the 
United States, as existing in the year 1868. The first officer 
named is the President; the second, the Secretary. 

iEtna Hartford, Ct., 1820 E. A. Bulkeley, T. 0. Enders. 

American Philadelphia, Pa., 1850 Alexander Whilldin, John S. Wilson. 

American Mutual New-Haven, Ct., 1848 Benjamin Noyes, R. F. Lyon. 

American Popular New-York City, 1866 Benj. F. Bancroft, Fred. Shonnard. 

Arkansas F., M., L., Ace. & Gen. Little Rock, 1868 C. G-. Scott, W. H. Fulton. 

Ins. Co. 

Arlington Mutual Richmond, Va., 1867 John E. Edwards, D. J. Hartsook. 

Asbury Life New-York, 1S68 

Atlantic Mutual Albany, N. Y., 1866 Robert H. Pruyn, Louis B. Smith. 

Atlas St, Louis, Mo., 1S66 Charles A. Mantz, J. R. Macbeth. 

American Tontine and Savings. New-York City, 1867 Wm. H. Ludlow, Wm. H. Snyder. 

Berkshire Pittsfield, Mass., 1S51 Thos. F. Plunkett, Benj. Chickering. 

Brooklyn Brooklyn, N. Y., 1864 Christian W. Bouck, Wm. M. Cole. 

Chicago Chicago, 111., 1867 W. F. Tucker, John W. Clapp. 

Carolina Memphis, Tenn., 1867 M. J. Wicks, W. F. Boyle. 

Charter Oak Hartford, Ct., 1850 James C. Walkley, Samuel H.White. 

Cincinnati Mutual Cincinnati, 0., 1866 Conduce G-. Megrue, J. F. Reynolds. 

Co-Operative Life Philadelphia, Pa., 1S68 Philip Lowry, Chas. C. Wilson. 

Connecticut General Hartford, Ct., 1865 Edward W. Parsons, Thos. W Russell. 

Connecticut Mutual Hartford, Ct., 1S46 Guy R. Phelps, W. S. Olmsted. 

Continental Hartford, Ct., 1862 John S. Rice, Samuel E. Elmore. 

Continental New-York City, 1866 Justus Lawrence, J. P. Rogers. 

Covenant Mutual St. Louis, Mo., 1853 A. F. Shapleigh, Charles C. Archer. 

Diamond State Mutual Wilmington, Del., 1867 James C. Aikin, Robert McCabe. 

Delaware Mutual Wilmington, Del., 186T. . .J. P. McLear, M. M. Child. 

Economical Mutual Providence, R. I., 1866 Simon S. Bucklin, Wm. Y. Potter. 

Eureka Life and Accident Philadelphia 

Equitable Assurance Society... .New-York City, 1859 Wm. C. Alexander, J. W. Alexander. 

Equitable Life Des Moines, Iowa, 1867 P. M. Casady, F. M. Hubbell. 

Excelsior New-York City, 1867 Samuel T. Howard, Sidney Ward. 

Eagle and Albion British, 1807 Sir J. B. East, J. Leycraft, Agt,, N. Y. 

European Association British, 1820 Fred. Smith, G. M. Knevitt, Agt., N.Y. 

First Nat. Eclectic Ass. Soc'y. . .New York City, 1S68 J. W. Barker, G. De McCarty. 

Franklin Indianapolis, Hid., 1S67 James M. Ray, Edward P. Howe. 

De Soto Mutual St. Louis, Mo J. H. Lucas, E. F. Pittman. 

General L. & Accdt. Mut'l Ins. Newark, N. J., 1S67 Isaac Pomeroy, John G. Drew. 

Co. 

German Mutual Cincinnati, O., 1862 H. Hemmelgarn, H. A. Ratterman. 

German Mutual St. Louis, Mo., 1857 Charles W. Horn, Arthur Olshausen. 

Germania New-York City, 1860 Hugo Wesendonck, C. Doremus. 

Girard Philadelphia, Pa., 1836 Thomas Ridgway, Pres. 

Globe Mutual New-York City, 1864 Pliny Freeman, Henry C. Freeman. 

Great Western . . New-York City, 1865 Robert Bage, E. Dwight Kendall. 

Guardian Mutual New- York City, 1S59 Walton H. Peckham, H. V. Gahagan. 

Hahnemann Cleveland, O., 1865 H. M. Chapin, James F. Crank. 

Hartford Life & Annuity Hartford, Ct., 1865 Thomas J. Vail, James P. Taylor. 

Hartford Mutual Life Ins. Co. .. Hartford, Ct., 1867 Thomas Cowles, Buel Sedgwick. 

Home New-York & Br'klyn, 1860 . . Walter S. Griffith, George C. Ripley. 

Home Mutual Cincinnati, O., 1S67 Orren E. Moore, Charles H. Frost. 

Hand-in-Hand Mutual Philadelphia, Pa., 1867 Nich. Rittenhouse, James G. Dixon. 

Homoeopathic New-York City D. D. T. Marshall. 

Hope Covington, Ky., 1865 George W. Holmes, John Crofton. 

International British, 1837 E. S. Symes, J. G. Holbrooke, Agt., 

N. Y. 

International Life Chicago, 111., 1868 Thos. Drummond, E. W. Porter. 

International Life & Trust New-York City, 1S68 

John Hancock Mutual Boston, Mass., 1862 George P. Sanger, George B. Ager. 



510 UNITED STATES LIFE ASSURANCE COMPANIES. 

Kentucky Mutual Covington, Ky., 1866 J. C. Beck, A. C. Dunlap. 

Knickerbocker New-York City, 1853 Erastus Lyman, George F. Sniffen. 

Liverpool, London & Globe British, 1836 J. A. Tobin, Alfred Pell, Agent, N.Y. 

Louisiana Equitable Life New-Orleans, La., 1868 Joseph Ellison, H. P. Harper. 

Missouri Mutual St. Louis, Mo., 1867 Theron Barnum, George H. Bender. 

Maryland Baltimore, Md., 1866 George P. Thomas, A. K. Foard. 

Manhattan ... New-York City. 1850 Henry Stokes, J. L. Halsey. 

Massachusetts Hospital Boston, Mass., 1818 George W. Lyman, Moses L. Hale. 

Massachusetts Mutual Springfield, Mass, 1851 Caleb Rice, F. B. Bacon. 

Mississippi Valley Covington, Ky., 1866 J. W. Finnell, A. H. Ransom. 

Mutual New-York City, 1842 Frederick S. Winston, F. Schroeder, 

J. M. Stuart. 

Mutual Benefit Newark, N. J., 1S45 Lewis C. Grover, Edward A. Strong. 

Mutual Chicago, 111., 1865 Merril Ladd, Charles B. Holmes. 

Mutual Protection Life New-York City, 1868 A. W. Morgan, F. H. Freeman. 

Michigan Mutual Detroit, Mich., 186T John J. Bagley, John T. Liggett. 

Metropolitan Life New-York City, 1867 James R. Dow, J. H. Taylor. 

National Capital Washington, D. C, 1867. . .Joseph F. Brown, G. Alfred Hall. 

Nashville Nashville, Tenn., 1867 John M. Bass, J. W. Hoyte. 

National Life Insurance Co Philadelphia, 1868 C. H. Clark. 

National of Vermont Montpelier, Vt., 1S50 J. Y. Dewey, George W. Reed. 

National , New-York City, 1863 Edward A. Jonas, John A. Mortimore. 

New-England Mutual Boston, Mass., 1835 Benj. F. Stevens, Joseph M. Gibbens. 

New-Jersey Mutual Newark, N. J., 1S65 Joseph P. Bradley, Wm. M. Simpson. 

New-York New-York City, 1841 Morris Franklin, Wm. H. Beers. 

New-York State Syracuse, N. Y., 1866 John J. Peck, George J. Gardner. 

North-America New-York City, 1862 N. D. Morgan, J. W. Merrill. 

North-American Life & Acc'dt.. Philadelphia, Pa., 1864 Lewis L. Houpt, S. P. Darlington. 

North-Western Mutual Milwaukee. Wis., 1859 S. S. Daggett, A. W. Kellogg. 

New-York L. & Trust New-York City, 1830 David Thompson, Philip R. Kearney. 

Pacific Mutual Life Sacramento, Cal., 1868 

Penn Mutual Life Philadelphia, Pa., 1S47 James Traquair, H. S. Stephens. 

Pennsylvania Co. for Ins. on Philadelphia, Pa., 1812.. .Charles Dutilh, Pres. 
Lives, etc. 

Phoenix Mutual Hartford, Ct, 1851 Edson Fessenden, James F. Burns. 

Protection Life Freeport, 111., 1868 J. H. Adams, J. D. Lemon. 

Provident L. & Trust Co Philadelphia, Pa., 1865. .. .Samuel R. Shipley, Pres. 

Provident L. & Investment Chicago, 111., 1865 Ira Y. Munn, C. Holland. 

Piedmont Real Estate Life Ins. Montreal, Va., 1867 Wm. C. Carrington, J. J. Hopkins. 

Co. 

Rock River Rockford, 111 

Royal British, 1845 C.Turner, A. B. McDonald, Agt, N. Y. 

San Francisco San Francisco, Cal 

Security New-York City, 1862 Robert L. Case, Isaac H. Allen. 

Southern Memphis, Tenn., 1866 F. M. White, Benjamin May. 

Southern Mutual Columbia, S. C, 1850 W. F. De Saussure, F. W. McMaster. 

Southern Life & Trust Mobile, Ala., 1866 Robert S. Bunker, S. C. Donaldson. 

Southern Mutual.. Louisville, Ky J. Lawrence Smith, L. T. Thustin. 

St. Louis Mutual St. Louis, Mo., 1858 D. A. January, William T. Selby. 

State Mutual Worcester, Mass., 1846 Isaac Davis, Clarendon Harris. 

Standard New-York City, 1867 Henry A. Elliott, James L.Dawes, 

Superior Life, Madison, Wis Madison, 1868 William E. Smith, George Capron. 

Travelers' Ins. Co., Life Dep't. .Hartford, Ct., 1866 James G. Batterson, Rodney Dennis. 

Union Central Cincinnati, 0., 1867 John Cochnower, N. W. Harris. 

Union Mutual of Me Boston, Mass., 1848 Henry Crocker, Whiting H. Hollister. 

U. S. Life and Casualty Insur- New-York, 1868 E. C. Fisher, Charles Winert. 

ance Co. 

United States New-York City, 1850.., John Eadie, Nicholas De Groot. 

Universal New-York City, 1865 William Walker, John H. Bewley. 

United States Mutual La Fayette, Ind., 1867 R. H. Milroy, George Williams. 

Washington New-York City, 1 S60 Cyrus Curtiss, Wm. A . Brewer, Jr. 

Western Cincinnati, O., 1866 William Resor, O. W. Ballard. 

Western New-York Life Batavia, N. Y., 1868 

Widows' & Orphans' Benefit. . .New-York City, 1864 Charles H. Raymond, H. B. Robinson. 

Widows' & Orphans' Fund Nashville, Tenn., 1868 

World Mutual New-York City, 1866 George L. Willard, Charles W. Plyer. 

PRESENT POSITION AND BUSINESS OF THE COMPANIES. 

In the United States there are about one hundred Life Companies, receiving 
an annual income of nearly $50,000,000. But little short of four hundred 
thousand lives are now assured, covering risks amounting to about $1,000,- 
000,000. These are striking proofs of the popularity of Life Assurance. 
During each year, more than six millions of dollars are paid by the Life Com- 
panies in the United States to the families or representatives of the assured ; 
mainly to widows and orphans. 



LIFE BUSINESS IN AMERICA. 511 

The number of policies now issued, yearly, by all the Companies in the 
United States, is not far from 120,000. 

From Mr. Barnes's report for 1868, we learn that the financial force of this 
great interest in New- York State alone, represented by 30 companies, amounts 
in their " gross assets" to the sum of $85,522,978.64 ; that they have in force 
policies insuring the immense aggregate of $612,721,431.03. Their premium 
income in 1867 amounted to $26,634,061.09, and the death claims paid on 
policies same year, $4,229,941.49. 

During 1867, there were 15 companies from other States represented by 
agents in New- York, and we may summarize their force thus : 

1. Gross assets of 15 other State companies $60,025,972 76 

2. Amount insured by 191,174 policies 549,008,345 24 

3. Premium income 23,749,269 21 

4. Death-claims paid 4,011,640 98 

Mr. Barnes observes, upon these figures, " That the amount insured, which 
five years ago was less than two hundred millions, has already reached the 
numeration column of our national debt, and exceeds a billion of dollars, 
with gross assets in hand exceeding one hundred and twenty-five millions. 
And still the work goes on with unflagging step and increased activity." 
And yet, " only four hundred thousand policies are in force in the United 
States, which do not probably cover over three hundred and fifty thousand 
lives, out of say thirty-five millions of people, of whom, at a moderate es- 
timate, five millions are insurable lives, producers, and legitimate subjects for 
insurance." 

RAPID GROWTH OF LIFE BUSINESS IN AMERICA. 

The growth of Life Assurance in this country, surprisingly rapid as it is, 
is not a false nor an unnatural growth. It rests upon a solid foundation of 
truth and reason. It results from a conviction which is every day gaining 
strength, of the incalculable benefits of the system. No other plan has been 
devised by which duty and affection can so adequately, so securely, and so 
instantly provide against the uncertainty and the irreparable loss of a pro- 
ductive human life. It only needs that the merits and beneficent working 
of the system should be more fully understood and appreciated, in order that 
life, the most valuable of the gifts of the Creator to man and his dependents, 
should be secured against the hazards of untimely death, as universally as 
the prudent insure their material possessions against the peril of destruction 
by the elements. The mature and enlightened conviction of the public will 
surely require that any man, with whose life providence and the order of 
nature have wrapped up the lives and well-being of others, should be deemed 
guilty of inexcusable selfishness and criminal improvidence, if he fails to in- 
voke for their protection the security which this system offers. 

The prevalence of Life Assurance may justly be regarded as the measure 
of advancing refinement and social virtue ; and if it be true that " if any pro- 
vide not for his own, and specially for those of his own house, he hath denied 
the faith, and is worse than an infidel," then it is also true that it is the type 
and outgrowth of practical Christianity. 

Life Assurance is, in fact, a necessity of American society. Our male popu- 
lation are emphatically a race of producers. The fortunes of a great majority 
of our families are in the productive brain or hand of the paternal head. 
Every such life has a value — not merely a moral value as weighed in the 
scale of social affection and family ties — but a A^alue which may be measured 
in money as a productive capital. It is to replace the loss of such a resource 
to the dependent members of the family group, that Life Assurance inter- 
poses its aid ; and by so doing it confers a benefit not only on the widow and 
orphan, but on society at large, by preventing their dependence on trie 
charities of the public, the breaking up of the family relation, and the de- 
struction of a home. It is also probably true that more than three-fourths of 



512 



MORTALITY IN THE UNITED STATES. 



all the premiums received by the companies, are paid by persons whose in- 
come is hardly more than enough for the current wants of life, and are thus 
saved not only to benefit the insured or his dependents, but to increase the 
accumulated and productive capital of the country. Were it not for the mo- 
tive and the opportunity which this system furnishes, these savings would 
practically be lost to the family and to the public. 

IMPORTANT STATISTICS OF MORTALITY IN THE UNITED STATES. 

The following facts, which we gather from the United States 
Census for 1860, are of great importance to the life assurance 
interests of the country : — 

The rate of mortality has ever been a leading object of statistical inquiry, 
and in connection with the number of births and migrations indicates the an- 
nual loss and gain of population. Besides the numerical proportion, expres- 
sively termed " the death-figure " by a German statist, the records of morta- 
lity have a physical significance in our own land for elucidating the relative 
prevalence of diseases, and the comparative salubrity of the climate on the 
Atlantic coast contrasted with the elevated interior and the valley of the Mis- 
sissippi. It is an interesting inquiry, whether the records of deaths over so 
large an extent of the new world shall disprove or confirm and enlarge the 
conclusions drawn from vital statistics in other lands, and shall point to simi- 
lar means of promoting health and longevity. 

Adopting, in a first view, the civil divisions of the United States, the num- 
ber of deaths returned to the Census office, and their ratio to the living popula- 
tion, are as follows. In making the present comparison, the population was 
changed according to the mean rate of increase from the end to the middle of 
the year in which the deaths occurred. 



deaths in the united states for the year ending 
june 1st, 1860. 



States and Ter- 




c 
o 



c5 


c 


d 

00 


States and Ter- 


_c 


<u 
c 
o 

o 


1 


1 


ritories. 


E 
C 
< 




p. 

n 


a 


ritories. 


3 
C 
C 
< 


P. 

o 

f~ 


ft 


c 


Alabama 


12,759 


74 


1-34 


1-20 


Maryland 


7,370 


92 


1-09 


1-68 


Arkansas 


8,855 


48 


206 


1-46 


Massachusetts. . 


21,303 


57 


1-76 


1'98 


California ... 


3,704 


101 


099 


1-00 


Michigan 


7,390 


100 


1-00 


1-16 


Connecticut... 


6,138 


74 


1-35 


1-59 


Minnesota 


1,108 


153 


0-65 


0-50 


Delaware 


1,246 


89 


1-13 


1-34 


Mississippi 


12,213 


64 


1-57 


1-46 


Florida 


1,764 


78 


1-28 


1-08 


Missouri 


17,652 


66 


1-52 


1"83 


Georgia 

Illinois 


12,816 


81 


1-23 


111 


New-Hampshire 


4,469 


72 


139 


1-35 


19,299 


87 


1-14 


1-38 


New- Jersey 


7,525 


88 


1-14 


134 


Indiana 


15,325 


87 


1-15 


1-32 


New- York 


46,881 


82 


1-22 


1-49 


Iowa 


7,259 


92 


1-09 


1-08 


North-Carolina . 


11,602 


84 


119 


1-21 


Kansas 


1,443 


73 


1-37 




Ohio 


24,724 


93 


1-07 


1-48 


Kentucky 


16,466 


69 


1-45 


1-56 


Oregon 


237 


218 


0-46 


036 


Louisiana 


12,324 


57 


1-76 


235 


Pennsylvania . . 


30,214 


95 


106 


1-26 


Maine 


7,614 


81 


1-23 


1-32 


Rhode Island. . . 


2,479 


69 


1-44 


155 


South Carolina 


9,745 


71 


1-41 


1-22 


Nebraska .... 


381 


75 


1-34 




Tennessee 


15,153 


72 


1-39 


1-20 


Nevada 










Texas 


9,377 


63 


1-58 


1-48 


New-Mexico. .. 


1,305 


71 


142 


i-9i 




3,355 

22,472 


92 


1-08 


102 


Utah 


374 


106 


94 


213 


Virginia 


70 


1-43 


1-36 


Washington . . . 
Dis. of Columbia 


50 


228 


0-44 




Wisconsin 

Colorado 


7,141 


107 


093 


0-97 1 


1,285 


58 


1-74 


1-66 




















Dakota 


4 






.... 1 


Total, U. States 


392,821 


79 


127 1-41 



MORTALITY IN THE UNITED STATES. 513 

It will be seen that the total return of deaths of all classes and ages, white 
and colored, for 1860, amounts to 392,821. In 1850, the returns gave 323,272 ; 
whence it appears that the number of annual deaths, after an interval of ten 
years, had been augmented by 69,549, that is, an increase of 21*51 per cent. 
In the same interval the total increase of the whole population, according to 
the census, has been 3558 per cent. Thus the mortality has not increased in 
proportion to the increase of population. 

Under equal conditions, this fact would favor a progressive salubrity in our 
climate, and undoubtedly there has been a sanitary improvement in many 
places. But the principal part of the difference in the rate of mortality is to 
be ascribed to the prevalence of cholera in 1849, swelling the deaths to an un- 
usual amount. A previous visitation of Asiatic cholera in 1832 with alarming 
reports of its ravages in Europe, and the consequent excitement of the public 
here, will long be remembered. Near the beginning of the year 1849 the 
pestilential scourge reappeared almost simultaneously in New- York and New- 
Orleans, and thence gradually spread over the whole country. Along the 
chain of the lakes, and in the Mississippi valley, it raged with peculiar vio- 
lence, and chiefly in the summer months, which are embraced in the census 
year, commencing on the first of June. Therefore, to render the circumstan- 
ces of the two enumerations more equal, let the deaths by cholera, 31,506 in 
number, be first taken out of the total mortality of 1850, the remaining deaths 
are 291,766. Comparing this number with the whole enumeration in 1860, 
which was a healthy year, we find an increase of 34*64 per cent., which differs 
but slightly, as will be seen, from the current increase of the living population. 
Thus, with proper and obvious corrections, the one class of returns has advan- 
ced in nearly equal proportion with the other. 

Among persons of foreign birth, the outbreak of this disease in 1849 appears 
to have been more violent than among the native residents. In the foreign 
portion of the population 11,056 deaths by cholera were reported in the census 
of 1850, besides an increase from the other zymotic diseases. It was in the 
midst of the vast emigration which has continued to arrive on our shores, and 
being attracted to the commercial centres where the disease chiefly prevailed, 
the mortality of emigrants then rose to nearly as large an amount as it has 
now reached ten years after. Including persons of unknown birth-place, the 
returns have been as follows : 

Deaths of foreigners in 1850 32,970 

Deaths of foreigners in 1860 34,705 

Another feature worthy of mention is the small mortality in the new States 
of Minnesota and Oregon, and in Washington Territory. On examining the 
returns, we find here the least mortality ; but early explorations in this terri- 
tory had determined "the skiey influences" to be favorable, and the climate 
healthy. Besides, it appears a general characteristic of the pioneer States that 
the more hardy and enterprising class predominate among the first settlers ; 
with a comparative absence of young and aged persons the deaths are less 
frequent. As immigration progresses, entire families with members of all 
ages become residents. The soil is broken by the plough, exposing vegetable 
matter to decomposition, and the deaths gradually occur in a greater ratio, as 
exhibited in the returns of the census. 

For reasons before stated, the per centages in the last two columns of the fol- 
lowing table will be understood as expressing not the absolute, but the relative, 
mortality of one section compared with another section, or with the whole Uni- 
ted States. The third, fifth, and seventh divisions will be seen to exhibit the 
smallest proportions of mortality, nearly equal or differing but little from 098, 
the mean value. The second division shows by far the greatest mortality ; the 
relative mean of two different years being 2 - 09 per cent, of the population, 
while the first, fourth, and sixth divisions, together with the remaining States 
not included above, conform nearly to the general average of the whole 
United States. 



514 



RELATIVE MORTALITY. 



The relative mortality in the great natural divisions is found to be as fol- 
lows: 



Natural Divisions. 



I. Lowlands of the Atlantic Coast 

Comprising a general breadth of 
two counties along the Atlantic 
from Delaware to Florida, inclu 
sive 



II. The Lower Mississippi Valley, 

Comprising Louisiana and a breadth 
of two counties along each bank 
of the river northward to Cape 
Girardeau, in Missouri 



Rate of Mortality. 



Annual deaths, 
1860. 



III. T/ie Alleghany Region, 

From Pennsylvania, through Vir- 
ginia, Eastern Tennessee, etc., to 
Northern Alabama 



IV. The Intermediate Region, 

Surrounding the Alleghanies, and 
extending to the lowlands of the 
Atlantic and to the Mississippi 
Valley 



V. The Pacific Coast. 

California, Oregon, and Washing- 
ton 



VI. The North-eastern States. 

Maine, New-Hampshire, and Ver- 
mont 



VII. The North-western States. 
Wisconsin, Iowa, and Minnesota. . 

The whole United States. . . 



15,292 



30,154 



26,346 



79,615 



3,991 



15,438 



15,508 



Per cent, of 
population. 



1-34 



1-81 



1-08' 



0-95 



1-24 



0-98 



1-27 



Per cent, in 
1850. 



1-45 



2-38 



1-19 



0-92 



1-25 



1-.01 



1-41 



The conclusions from the census, thus briefly stated, appear entirely accord- 
ant with the topography of the country, and illustrate how far the human 
system has power to withstand the influence of diverse temperatures and 
climates. Leaving out the Alleghany region, and its extension through the 
Catskill and White Mountains to Maine, the surface of the populated States 
nowhere rises more than a few hundred feet above the sea level. The extent 
from north to south, through twenty degrees of latitude, presents an agree- 
able " interchange of hill and valley, rivers, woods, and plains," most happily 
situated between the rigors of the polar and the flaming heat of the tropic 



GEOGRAPHICAL DISTRIBUTION 515 

regions. Hence, with the exceptions indicated, a considerable uniformity 
might be expected in the prevailing- rate of mortality ; and such is, in fact, the 
result of the census. There appear no marked deviations on a large scale from 
the common standard, or mean of the two enumerations in 1850 and 1860, ex- 
cept in the divisions already specified, where climatic causes of a diverse 
nature are plainly in operation. 

The first division, comprising the great Atlantic plain, was remarked by the 
early explorers in America on account of its uniform level over a length of a 
thousand miles along the coast, and extending from fifty to one hundred miles 
inland. The sea and shore meet, for the most part, in a mingled series of bays, 
estuaries, and small islands rising just above the tide. The low grounds in 
summer abound in miasm, and a single night's exposure in the rice-fields of 
Carolina is said to be very dangerous, and carefully avoided. But, away from 
the cypress swamps and marshes, there is generally a sandy soil ; and the ag- 
gregate mortality is found by the census to rise above, though not much 
above, the general average of the whole country. In every few years, how- 
ever, it is well known that the low portions from Norfolk, southward and ex- 
tending around the Gulf of Mexico, are visited by epidemic disease, when the 
mortality rises much higher than the ordinary amount. 

In respect to the second division, it may be observed that, while the low 
valley or trough of the Missouri river, for example, is five miles in width, 
the alluvial tract of tlie Mississippi is often from forty to fifty miles in breadth. 
On each side of this river plain are the line of bluffs, which are very steep, 
and in some places rise two or three hundred feet in height. The river is 
described as coursing its way between these bluffs, so called, here veering to 
one side, there to the other, and occasionally leaving the whole alluvial 
tract on one side. The annual flood commences in March, continuing two or 
three months. During this time the river plain is submerged to the not un- 
usual depth of fifty feet below the junction of the Ohio river, the additional 
depth decreasing to ten or twelve feet at New-Orleans. The lateral overflow 
is principally on the western side, and covers an area from ten to fifty miles 
wide. A periodic inundation of such vast dimensions will rank among the 
grandest features of the western continent. Towards the last of May the 
water subsides, leaving the broad alluvial plain interspersed with lakes, stag- 
nant pools, and swamps, abounding in cottonwood, cypress, and coarse grass. 
The flood leaves also a new layer of vegetable and animal matter exposed to 
fermentation and decay under the augmenting heat of the summer sun. 
When, in addition to this, the air becomes unusually damp during the hot 
season, the conditions of epidemic disease, according to medical authority, are 
fully present. What the Roman poet expressively termed the " cohort of 
fevers" then advances upon the human race as it were in destructive conflict ; 
the abundant alluvial matter decomposing under a high temperature, with 
occasionally a more humid and stagnant atmosphere. These are stated to be 
the conditions by which the mortality of the lower Mississippi valley has 
reached the high rate indicated by the census. The portion embraced in the 
foregoing classification was terminated on the north with the county of Cape 
Girardeau, for the reason that the hilly country in that vicinity is connected 
with a rocky stratum traversing the beds of both the Mississippi and Ohio 
rivers. From this great chain southward to the Gulf of Mexico is an extent 
of between six and seven hundred miles. The entire valley, according to 
geologists, may have been once an arm or estuary of the ocean extending in- 
land from the Gulf of Mexico. The present influence of so large an area of 
alluvial matter must pervade the adjacent borders to a certain undefined ex- 
tent. 

The third division, or Alleghany country, is exhibit •! hv the statistics as 
a region of great salubrity. It consists of high ridges running nearly parallel 
with the sea-coast through an extent of nine hundred miles, with a breadth 
varying from fifty to two hundred miles. The ridges are generally well 
watered and wooded to the summit, and between are extensive and fertile 
valleys ; they are known as the Blue Ridge, Alleghany Ridge, North Mountain, 



516 



CLASSIFICATION" OF DEATHS. 



Cumberland Ridge, and others. The region has "been termed an elevated 
plateau or water-shed, whence the rivers flow eastward to the Atlantic and 
westward to the Mississippi and Ohio valleys. The ridges being for the most 
part about half a mile high, appear to exercise no other influence on the cli- 
mate than what is due to mere elevation, thus securing a pure atmosphere 
and other conditions favorable to the growth of a healthy and vigorous 
population. 

On the Pacific coast, the seasons of the year have an entirely different type 
from that of the eastern United States. A cold sea current apparently cools 
down the temperature of summer, so that July is only 8° or 9° Fahrenheit 
warmer than January, and September is the hottest month. From this cause, 
Indian corn fails to come to maturity, although wheat and other cereals, as 
well as orchard fruits, flourish in fine perfection. The elastic atmosphere and 
bracing effect of the climate have been remarked by settlers from all quarters 
of the globe. 

In the north-western States, a continental, as distinguished from a sea, 
climate prevails with wide extremes of temperature. In the north-eastern 
States, also, the thermometer ranges through more than a hundred degrees 
from winter to summer, yet the year appears generally healthy. Without 
entering into further details on this or the other divisions, enough evidence 
has been offered to show a certain correspondence between the physical fea- 
tures of the country and the mortality returns of the census. 

Once more let us glance at the statistics of mortality with reference to the 
Ages at death. The whole number, including white and colored, are exhibited 
in the following table. The right hand columns on the scale of 100 are 
designed to serve, in some degree, the purpose of a diagram for illustrating 
the relative numbers deceased at different periods of life : 

DEATHS CLASSIFIED BY AGES AND BY SEX, 1860. 



Ages. 


Number enumerated. 




Proportions. 




















Males. 


Females. 


Total. 


Males. 


Fem'les. 


Total, '60. 


Total, '50. 


0—1.... 


44,480 


36,794 


81,274 


1135 


939 


2074 


16 90 


1—2.... 


20,588 


17,648 


38,236 


525 


451 


9-76 


1 


2—3.... 


12,493 


11,153 


23,646 


3-19 


2-85 


604 


L 21-41 


3—4.... 


7,567 


7,083 


14,650 


1-93 


1-81 


3-74 


4—5.... 


5,332 


5,147 


10,479 


1-36 


1-31 


2-67 


J 


5—10. . . . 


13,822 


13,637 


27,459 


353 


3-48 


7-01 


6.68 


10—15. . . . 


6,369 


6,768 


13,137 


1-63 


1-73 


3-36 


4.12 


15—20. . . . 


8,111 


9,265 


17,376 


2-07 


2-36 


4-43 


4.79 


20-25. . . . 


10,398 


10,551 


20,949 


265 


2-69 


5.34 


I 11-74 


25—30. . . . 


9,452 


9,560 


19,012 


2.41 


2-44 


4-85 


30—40. . . . 


16,224 


15,343 


31,567 


4-14 


3-92 


8-06 


9-07 


40-50. . . . 


13,470 


10,522 


23,992 


344 


2-68 


612 


7-14 


50—60.... 


11,902 


8,514 


20,416 


304 


2-17 


5-21 


5-56 


60—70. . . . 


11,284 


8,823 


20,107 


2-88 


2-25 


5-13 


5-12 


70—80. . . . 


8,995 


8,009 


17,004 


230 


205 


4-35 


417 


80—90 ... 


4,776 


4,808 


9,584 


1-22 


1-23 


2-45 


2-54 


90— .... 


1,284 


1,590 


2,874 


033 


0-41 


074 


076 


Unknown 


688 


371 


1,059 










Total. . . 


207,235 


185,586 


392,821 


52-72 


47-28 


10000 


100 00 



In the last column but one the sum of the four per centages between one 
and five years of age is 22-21, which does not essentially differ from 2141, the 
corresponding per centage in 1850. By comparison throughout the last two 
columns, it will further appear that the only marked difference in the distri- 



RATIO OF DEATHS IN EUROPE. 



517 



bution of ages at death, in 1850 and 1860, is in early infancy, or under one 
year of age. From some misapprehension, occasionally an assistant marshal, not 
regarding infants as a part of the active population, has been less careful of their 
enumeration ; and the greater proportion of infants in 1860 should doubtless 
be ascribed to a more complete enumeration. Upon the middle ages of life, 
in 1850, the cholera has traced a perceptible effect, as was to be expected from 
the immigration. With proper allowance for this feature, the return of deaths 
in 1860, for all ages above the first, appears similar and conformable to that 
of 1850! 

As before shown, the total deaths returned in 1860 were 1 in 79 of the popu- 
lation ; and in the less healthy year of 1850 the stated deaths were 1 in 71 ol 
the population, a few still-births being included. In Europe, the correspond- 
ing ratios, exclusive of still-births, have been recently collected by Professor 
Wappaus * from ten years official statistics, and are shown in the middle 
column following : 

RATIO OF DEATHS TNT EUROPE. 



Countries. 


Population 

to 
one death. 


The same 
adjusted to 
the scale of 
population in 
the U. States 
in 1850. 


Norway, 

Sweden, 


56 
49 
49 
44 
44 
42 
39 
36 


47 
44 
46 




France, 









The wide deviation of the stated ratio in the United States from these values 
is partly due to the more youthful character of the American population, sus- 
tained by a constant immigration . However, by the aid of the rates of mortality at 
different ages in England and France.f with those of Belgium, applied to the 
United States census of 1850, the unequal distribution of ages is here corrected 
in the three values of the last column. A large deficiency in our return of 
deaths is still indicated. 

With regard to the question frequently asked, How much ought to be 
added to the census returns of deaths, in order to approximate to the true 
numbers? the way for an answer, as definite as the subject admits, has been 
opened by a recent investigation. From a combination of statistical data, it 
has been demonstrated by Mr. L. W. Meech that the rate of mortality in the 
United States during the last half century has continued between limits, 
whereof the higher is represented by the English life table, and the lower by 
those of continental Europe. From this proposition, compared with the last 
column above, the conclusion is derived, that the annual deaths in the United 
States have been one in 45 or 46 of the population. There are localities where the 
" length of days " among the people is considerably above this standard, and 
others where it is below it ; the value just stated, in the long average, cannot 
be far from the truth. 

The question of supplying the deficient number of deaths can now be 
answered by an approximate correction. To avoid irregularities in the regis- 
try of infants, the returns " under five" are at present omitted. Applying the 
foregoing method, and regarding the deaths of 1850 as excessive from chole- 
ra, it finally appears that the census of deaths above five years of age should 
be increased by about five-twelfths. The same rule may possibly apply to the 

* Bevolkerungsstatistik, i. p. 160. 

t Eighteenth Report of the Registrar General (England), p. 32. 



518 ON A GENERAL LIFE TABLE. 

deaths noted as " one and under five ;" but " under one," the number should 
be increased in a greater ratio, not here determined. Thus in the aggregate 
of the whole country, so far as can now be ascertained, where seventeen deaths 
actually occurred, only twelve were reported in the census, exclusive of early 
infancy. 

According to the preceding determination of one annual death in 45*5 living 
at the middle of the year, the 323,272 deaths returned in 1850, by supplying 
the omissions, become 501,000 ; and the 392,821 deaths enumerated in 1860, 
should similarly be increased to 680,000, At this rate, nearly six millions 
(5,905,000) of our population have deceased in the past ten years, and their 
places have been supplied by the advancing numbers of a new generation. 

In concluding this discussion, it may be observed that the census of morta- 
lity compared with the topography of the United States will tend to illustrate 
the advantages of intercommunication. Our magnificent railroads and steam- 
boat lines traversing immense distances, while promoting an exchange of pro- 
ducts, and accommodating alike the tourist and the man of business, constitute 
an important agency for relieving the mind and improving the health of the 
people. To those persons who find the sea-coast air injurious, to the seden- 
tary professions and city residents wearied with the dust and heat of summer 
and the cares of business, a change of air, and the shifting panorama of new 
scenes open renewed sources of enjoyment, in which all members of the fam- 
ily should participate. A few mineral springs and " watering-places " at the 
sea-side or among the mountains are liberally patronized. Yet the adaptation 
of our country to a more general system of travel and periodic resort, for sani- 
tary objects, presents a most useful field of inquiry. 

The mortality of cities still exceeds that of the country, especially among 
children. And in both town and country a vast amount of needless sickness 
exists, which is proved to be preventible by ordinary means. The sanitary 
improvement of cities must be chiefly intrusted to health officers on the spot, 
who are conversant with the localities. Yet many of the topics have a popu- 
lar interest ; such as the introduction of the water-supply, of which the Fair- 
mount, the Cochituate, and the Croton water- works are examples, the difficult 
art of complete sewerage and drainage, the opening of public parks and gar- 
dens, and the construction of improved tenement-buildings. The vaccination 
of children before admission to the large public schools has been proposed, on 
account of the loss and annoyance from irruptions of the small-pox, a requisite 
which parental duty should have anticipated. The universal practice of this 
safeguard is strenuously urged ; for, besides frequent cases of unavoidable ex- 
posure, of loathsome sickness, and entailed suffering, many lives are annually 
lost by the culpable neglect of vaccination. 

A great improvement in the registration of deaths, beyond the bare enume- 
ration of the old " bills of mortality " consists in noting the principal circum- 
stances of decease. This prepares the way, in skilful hands, for special and 
instructive researches. The classification of deaths with reference to intem- 
perance, io different occupations and trades, will determine among what class- 
es the mortality is the most excessive, and aid to disclose the causes. The value 
of this statistical method is illustrated by several remarkable sanitary investi- 
gations which have appeared within the last half century in Europe and 
America. After the facts comes the demand for new improvements and inven- 
tions. Some are required in the line of Davy's safety-lamp for diminishing 
casualties, and others for adapting the operations and processes of the work- 
room to the health of the operatives. The subject is one of special interest, 
and worthy of sustained examination by our physicians and inventors. In 
numerous ways the information is so important that an official registration of 
deaths, notwithstanding the first deficiencies, is gaining adoption among all 
civilized nations. 

On a general Life Table.— Were the enumeration of deaths entirely correct, 
and were the record combined with that of population, and cast into the sys- 
tematic form of a life table, the value of this part of the census would be very 
greatly augmented. The plainest and most advantageous mode of expressing 



DISEASES AND CAUSES OF DEATH. 519 

tlie relations of mortality to the population is conceded to be the life table, de- 
vised by Dr. Halley. In its elementary form it shows at a glance the propor- 
tion of persons surviving from one age to any other given age ; in another 
form it exhibits the average duration or " expectation of life." 

The Carlisle table, which has chiefly been used in England and America, 
was constructed by Milne from the returns during nine years, 1779-'87, of 
two healthy parishes in the city and suburbs of Carlisle, in the north of Eng- 
land. That this table should represent life insurance risks with accuracy 
during half a century is singular and remarkable. The coincidence is ascribed 
to what is termed " the selection of lives," since all the offices have required 
a medical examination of the assured. 

The standard of longevity in the Carlisle table may thus be well adapted to 
life insurance, while it is too high for the whole population. M. Baily, a dis- 
tinguished authority in London, forcibly remarks : "It must appear extremely 
incorrect to take the mortality in one particular town as a criterion for 
that of the whole country. The observations ought to be made on the king- 
dom at large, in the same manner as in Sweden ; more particularly as, in the 
real business of life, the calculations are general and uniform, and adapted to 
persons in every situation. But till the legislature thinks proper to admit 
some efficient plan for furnishing these data, we must rest contented with the 
laudable exertions of public-spirited individuals, and avail ourselves of the 
best light which they afford on this subject." 

DISEASES, AND CAUSES OF DEATH. 

In the previous discussion of mortality statistics from other points of view, 
the conclusion was reached (p. 517) that the actual deaths in the United States 
occur at the rate of one in forty-five or forty-six of the whole population, and 
that tney amounted to about 680,000 during the year 1860. It will further be 
admitted, in respect to the corresponding prevalence of sickness and invaliding, 
that twice the number of annual deaths in a large community will exhibit 
very nearly the number that are constantly sick. This rule is practically con- 
firmed by numerous statistical comparisons, and though applicable more di- 
rectly to manhood than to infancy and old age, yet on the whole it is found to 
furnish a near and convenient approximation. Accordingly, doubling the 
number of deaths, we readily obtain 1,360,000 for the number constantly sick 
during the year of the census. 

The number of sick will be seen to constitute about one twenty-third part of 
the whole population. Besides watch-care, maintenance, and other attendant 
charges, so much is the efficiency of our population in respect to labor dimin- 
ished, and so much is lost to industry and production. It is true that a certain 
prevalence of disease must be deemed, in the course of nature, " the inevita- 
ble lot ;" yet a large portion is needless, being clearly traceable to the neglect 
of temperance and the laws of health. The diminution of the current rate 
of sickness and mortaUty evidently pertains to the general prosperity and 
happiness, and may well constitute the leading idea in examining the statistics 
of disease. 

What diseases are most influenced by the vicissitudes of climate, and 
what by the conditions of place ? The former depending on the condition 
of the atmosphere, and attacking many persons at the same time, have long 
since been designated epidemic diseases ; of which fever, dysentery, influ- 
enza, small-pox, and scarlatina or scarlet fever, are examples. The diseases 
arising from some peculiarity of the soil and surface have been similarly 
termed endemic ; thus, ague is endemic in some marshy districts. More re- 
cently it has been proposed to include both epidemic and endemic, together 
with contagious diseases, under the single title of zymotic diseases. The 
zymotic, from a Greek word signifying leaven or fermentation, are the first 
division in the general classification of diseases by Dr. Farr, whose researches 
now constitute a fundamental portion of the system of vital statistics. 

Among zymotics are arranged four diseases which are contagious, and 
which can visit the same individual, as a general rule, but once in the life- 



520 



ZYMOTIC DISEASES. 



time ; these are small-pox, measles, scarlatina, and whooping-cough. The last 
three prevail among children more especially. Other maladies under this 
head, such as dysentery, fevers, and cholera, are noted for wide fluctuations in 
different periods. Such peculiarities give to this category the greatest inter- 
est, and the question whether one particular year or locality is more healthy 
than another chiefly depends on the relative mortality from zymotic diseases. 
All other diseases may be regarded as isolated disorders, such as apoplexy, 
consumption, dropsy, which bear off nearly the same proportion of the living 
in every year. 

ZYMOTIC DISEASES. 



Cholera 

Cholera infantum 

Croup 

Diarrhoea 

Dysentery 

Erysipelas 

Fever, intermittent.. . . 

Fever, remittent 

Fever, typhoid, typhus. 

Fever, yellow 

Influenza 

Measles 

Scarlatina 

Small-pox 

Syphilis 

Thrush 

Whooping-cough 



Total zymotic. 



Other specified diseases. 

Violent deaths 

Unknown , 



Grand total , 393,606 323,023 100 ■ 00 



Deaths, 



985 

4,804 

15,188 

7,847 

10,461 

2,756 

4,447 

11,102 

19,207 

657 

387 

3,900 

26,393 

1,263 

231 

554 

8,400 



118,582 

218,261 
20,115 
36,648 



Deaths, 
1850. 



33,074 

3,960 

10,706 

6,366 

20,556 

2,768 

964 

18,496 

13,099 

785 

252 

2,983 

9,584 

2,352 

146 

424 

5,280 



131,813 

134,803 
12,174 
44,233 



Proportions, 



0-28 
1-35 
4'25 
2-20 
2-93 
0-77 



1 
3 
5 



1 

7 

0-35 

0-07 

0-16 

2-35 



33-22 

61-14 
5 64 



Proportions, 

1850. 



11-87 
1-45 
3-84 
2-28 
7-38 
1-00 
0-35 
6-63 
4-69 
0-28 
0-09 
1-07 
3-44 
0-84 
0-05 
015 
1-90 



47.28 

48-36 
4-36 



100-00 



Here the wide and striking difference between the proportions of zymotic 
disease, 33 and 47 per cent., at once indicates the year ending June 1st, 1850, to 
have been one of unusual mortality. The prevalence of Asiatic cholera has 
already been mentioned. (Page 513.) It will be seen that dysentery and remit- 
tent or common fever also prevailed in excess during the same year with the 
Asiatic or epidemic cholera. But deaths from intermittent fever (fever and 
ague) and from scarlatina (scarlet fever) were more frequent in the year of 
1860 than from the same diseases in the former year. 

Cholera, meaning primarily a vomiting or purging of bile, has the three 
varieties of cholera morbus, Asiatic cholera, and cholera infantum. The first 
two have been classed under the single head of cholera, since both have simi- 
lar characteristics. It is usually after long intervals that some contagion in 
the air gives the disease a malignant type, as above noted. Of the deaths re- 
turned in 1850 there were 1,568 from cholera morbus, although there appears 
no very definite line of distinction between this and epidemic cholera. 

Cholera infantum, allied to diarrhoea, is one of the summer diseases of chil- 
dren, which proves most fatal with those from three to eighteen months old, 
and during the process of teething. The deaths from this disease appear to 
have been almost equally distributed in 1850 and 1860, and very many of 
them have probably occurred in the large cities. 



FATAL MALADIES IN THE UNITED STATES. 



521 



Yellow fever appears not to have prevailed extensively in either year. Only 
785 deaths from this cause were reported in 1850, and only 657 in the year 
1860. At intervals of years this disease takes a malignant type and prevails 
a dreaded scourge in tropical climates along the sea-coast. 

The whole population increased in the last ten years about 35 per cent. 
Therefore by adding a little more than one-third to the deaths by each disease 
in 1850 the results can then be compared with those of 1860 on an equal basis 
of population. By this method it will be found that measles and thrush (can- 
cerous sore mouth) occurred with equal rates of mortality in both years ; croup 
and some other diseases nearly so, as will be seen by inspection of the pre- 
ceding statistics. 

In answer to the inquiry, What maladies have been the most fatal in the 
United States ? we remark that the number of deaths by consumption is the 
greatest of all. Next to this is the family of fevers, of which the mortality 
has just been stated. The deaths from consumption and some other noted 
diseases have been as follows : 



Diseases. 



Consumption 

Pneumonia 

Pleurisy 

Scrofula 

Delirium tremens, intemperance, 

Dropsy 

Diphtheria 



Deaths in 1860. 


Deaths in 1850. 


48,971 


33,516 


27,076 


12,130 


1,262 


2,167 


2,683 


1,860 


1,504 


951 


12,034 


11,217 


1,663 





Consumption, according to medical authority, " begins with a change in the 
constitution, followed by the deposit of a cheese-like matter, forming tubercles 
in the lungs and other parts, ending in ulceration. When this tuberculous 
matter is deposited in the glands of the neck and in the bones and joints, it 
constitutes scrofula ; in the glands of the abdomen, mesenteric disease ; nei- 
ther of which affections differs from consumption in its essential anatomical 
cause." Consumption is believed to prevail more extensively in the Northern 
States, as fevers predominate in the Southern States. Pneumonia is charac- 
terized by inflammation of the lungs, a,nd pleurisy by inflammation of the lin- 
ing membrane of the lungs. The total deaths in 1860 from consumption, 
pneumonia, and pleurisy were 77,309. 

Delirium tremens, or mania a potu, " a disease caused by the abuse of spirit- 
uous liquors, is characterized by tremor, sleeplessness, and delirium." Under 
lie same head are brought the deaths returned from intemperance, making a 
„otal of 1,504, and showing the large increase of 58 per cent, during the past 
ten years. 

Diphtheria is the most recent name of a disease characterized by a thick 
membranous exudation in the throat. It is allied to croup and to scarlet fever, 
with which it is sometimes confounded. It is asserted to be not contagious, 
but curable in a large majority of cases. In 1850, the name had attracted 
little or no attention ; and in 1860 the number of deaths from this cause were 
but 1,663, a number much less than the notoriety of the disease would imply. 
It belongs to the zymotic class. 

Lastly, the statistics of Violent Deaths will be found interesting, as the 
causes of demise are more intelligible or less shrouded in mystery than those 
of disease. It appears that only 5,669 " accidental deaths " of females were re- 
ported, against 12,399 deaths of males by accident. A still greater disparity 
of the same kind is shown in the subdivisions of "drowning, fall, fire-arms, 
freezing," and " railroad " accidents. The deaths by " suffocation," however, 
are quite evenly distributed among the two sexes. But among the deaths by 
" burns and scalds " the predominant loss ranges decidedly to the side of fe- 



522 VITAL STATISTICS. 

males, a result of fire naturally following from domestic avocations and differ- 
ence in attire. On the whole, taking the accidental deaths as the measures 
of risk during that year contrasted with the present, the implied inference 
may be expressed that the male class are fully twice as much exposed to dan- 
gers as the female class in their usual habits of life. 

Under the head of suicides are counted 794 deaths of males and 208 of fe- 
males, or nearly as four to one. Among these desertions from life " hang- 
ing " is the principal resort. To complete the dark picture in which has been 
given to the " unproportioned thought, its act," 458 deaths by justifiable 
and unjustifiable "homicide" are also reported, together with 526 "mur- 
ders " and 61 " executions." So many distinct cases have been gathered, and 
a considerable number more have doubtless escaped registration. 

VITAL STATISTICS OF THE MUTUAL LIFE INSURANCE COMPANY OF 
NEW-YOEK FOE 25 YEAES. 

It is with very great satisfaction that we are able to insert the 
following facts touching American vitality, from the experience 
of the largest Life Company in the United States, during the 
period of a quarter of a century. We quote from the report of 
the Medical Examiners of the Mutual Life Insurance Company, of 
New-York, for 1868. 

"This home experience of twenty-five years is now happily long enough in 
duration, and large enough in extent, to make it more reliable than any 
based exclusively upon results gathered from a foreign country, and from a 
population different from our own. 

"The absence of American vital statistics has compelled our Life compa- 
nies to rely, in great measure, upon those of foreign origin. Our experience 
has, however, now become so extensive in this country, that it is believed to 
be a proper period to constitute a department for this purpose, in which im- 
portant facts will be recorded, experience collated, and deductions made. 
Facts, when classified and arranged, develop principles. And their applica- 
tion to the science of Life Assurance will be of the highest value in determin- 
ing rates, in the selection of risks, and in estimating the various influen- 
ces which modify life in America, such as climate, habits, occupations, tem- 
peraments, hereditary predisposition, etc. ; the importance of this subject will 
at once be apparent, when we reflect upon the immense area over which 
we extend our operations, and the various nationalities we assure. A com- 
parison between the death-rate as occurring among the Life companies of 
this* country and that of Europe, will lead to a just estimation of the circum- 
stances which determine the difference in the duration of life, and will 
confirm or confute the opinions which have been entertained on this subject. 
Whatever is vague or uncertain will be subjected to a severe and searching 
scrutiny ; and much valuable information, having an important bearing upon 
the business of assuring lives, will unquestionably result therefrom. Among 
many interesting facts, the recital of which will be furnished in detail, our 
examination shows that Life Assurance tends to length of years. It takes a 
load from the anxious mind, and, with other good influences, is a support 
amid the trials of sickness and the cares of life. 

" It thus sustains while it provides, and adds length of years to the other 
blessings which it bestows. 

"The following statement exhibits the whole number of deaths which have 
occurred in the twenty-five years ending the 31st day of January, 



VITAL STATISTICS. 



52; 



Statement of the number of Deaths which have occurred in the Mutual Life Insurance 
Cohpant of New-York, for the 25 years ending the 31st day of January, 18(38. 



CAUSE OF DEATH. 



Zymotic diseases.. 
Nervous system. .. 
Respiratory organs 
Circulatory system 
Digestive system. . 

Genito-urinary 

Uncertain seat 

Integumentary 

External causes 

Age 



OS o 
loS 00 .00 CO |oS 00 



410 

6 2 

2 

1 



13,33 32 

2 6 10 
9|ll,17 

15.. 
6 6 



2! 2 

'9 



Total in each year. . . 5 5 25,23 32 1 72 75 34 79 72 93 82 73 



3; 4 



..I 2 

iil'a 



9 10 
17 16 
20 33 

6 3 
2211 

41 1 

9 



_ did ^ 



:■* e 



IS 3 3 



el 8 

13!14 
30 



10 7 
10 19 
3; 5 



7 9 
2 4 
6 15 



20; 20 

21| 36 

54! 46 

141 14 



8SlS6 107 126 137 161 181 201 264 2206 



" During the past ten years, 1,438 deaths have occurred, the proofs of which 
have, within a few months, been carefully examined and compared with the 
original applications. Important observations have been made, which will 
aid us much in determining certain points in our selection of lives for 
insurance, particularly concerning the hereditary transmission of disease. 
These proofs, together with the experience derived from the investigations 
of the records of this company for the first fifteen years, furnish a record of 
all the deaths, amounting to 2,206, as far as reported, from the foundation of 
the company, a period of twenty-five years. 

" Of the 1,438 who have died during the past ten years, the names and 
residences have been tabulated, also the diseases of which they died ; the age 
at which they were insured noted, and how long they lived. The special 
occupation, as influencing human life, has also been remarked. 

" It has been ascertained how many have died under the age of 25 years, 
and how long they lived after being insured. The same has been remarked, 
of those who died between the ages of 25 and 35, 35 and 50, 50 and 60, 60 
and upward. 

" 3y reference to these tables it will be seen that, after computing the aggre- 
gate number of years which the relative ages (under 25, 25 to 35, etc.) have 
lived, and dividing this number by the sum of all the persons who were 
insured at such ages, the average number of years which they lived will be 
given, and the periods which have marked the fewest deaths ascertained. 
The same course pursued with reference to the deaths by consumption and 
apoplexy will afford an opportunity of comparing at which period of life the 
smallest number have died of these diseases. 

" This information, we think, will prove valuable at this time, when so 
many who have not attained maturity are applying for large insurances 
upon their lives. 

" In the cases of those who have died of consumption, the length of time they 
have lived after being insured has been noted, and any hereditary predis- 
position to that disease, as stated in the application, has been carefully traced. 
Also, whether any previous disease is said to have existed at the time of 
insurance, which might have influenced the life of the applicant. It has 
been also interesting to inquire whether those in whose family consumption 
existed, and who did not fall victims to that disease, have died of some other 
kindred disease, such as cancer, dropsy, asthma, etc. 

" The same course has been pursued with regard to apoplexy and paralysis. 
The hereditary tendency has been sought by making comparisons, as before, 
and noting, also, whether any predisposition to such disease was foresha- 
dowed in the applicant while living. 

" Any tendency or symptom, as noted in the application, has been looked for, 
and also any so-called acquired predisposition, especially as indicated by the 
height and weight of those who have died of disease of the head or brain. 

" The per centage of the whole number who have died of apoplexy and 



524 THE CONTRIBUTION PLAN. 

paralysis, including acute inflammation of the brain, is 13yV, or about 1 in 8. 
Our experience has shown that of the diseases of the respiratory organs, 
assigned to class 3, comparatively few have been due to tuberculosis, or 
pulmonary consumption. The per centage of the whole number who have 
died of this disease is 18, or a little more than 1 in 6. Many of those in this 
class, from pleuro-pneumonia and bronchitis, might much more justly be 
attributed to intemperance, exposure, or other depressing causes. 

" We have also been exempt from frequent losses by diseases of the circu- 
latory system, including diseases of the heart ; and this fact, taken in 
connection with our favorable experience in consumption, evinces much care 
and thorough acquaintance with the principles of physical diagnosis on the 
part of our medical examiners throughout the country. 

" The number of deaths from diseases of the kidneys has been small, and 
those from bilious colic very few, not exceeding 3 or 4. 

" Two only are reported to have died of age, although many have reached 
their expectation of life. 

" In class 9 are included those who died in the military service of the United 
States in the late war, and who were exposed alike to the dangers of battle 
and disease. 

" The following table embraces the whole number of deaths which have 
been reported at the office for the year ending January 31st, 1868 : 

CLASS. 

1st. Zymotic diseases, (fevers, cholera, dysentery, small-pox, &c.) 35 

2d. Diseases of the nervous system, (apoplexy, palsy, paralysis, epilepsy, delirium 

tremens, &c.) 47 

3d. Respiratory system, (consumption, asthma, bronchitis, &c.) 80 

4th. Circulatory system, (diseases of the heart, aneurism, &c.) 20 

5th. Digestive system, (diseases of the stomach, liver, hernia, jaundice, &c.) 40 

6th. Genito-urinary system, (diabetes, gravel, &c.) 12 

7th. Uncertain seat, (rheumatism, scrofula, cancer, dropsy, &c.) 12 

8th. Integumentary system, (erysipelas, &c.) 3 

9th. Diseases from external causes, accidents, suicides, &c 14 

10th. Age 1 

Total ..264 

" As compared with the mortality of last year, the above returns show an 
increase of 15 from zymotic diseases ; of 11 from diseases of the nervous 
system ; of 34 from diseases of the respiratory system ; of 6 from diseases 
of the circulatory system ; of 2 from diseases of the genito-urinary system ; 
of 5 from diseases of uncertain seat ; and of 1 of the integumentary system. 
There is a diminution of 4 deaths from diseases of external causes, and of 7 
from diseases of the digestive organs." 

MATHEMATICAL DEMONSTRATION OF THE CONTRIBUTION PLAN.* 

We are permitted by Mr. Homans to introduce here his very able demon- 
stration upon the Contribution plan of dividends : that is, of dividing the surplus 
among Policy-holders in proportion to their individual over-payments or con- 
tributions to the Surplus Fund. This article has been accepted, in England and 
in this country, as a most perfect scientific document. Prefacing the calcula- 
tions, the author remarks that, " There are in general but three sources from 
which the surplus of a life insurance company can be derived. First. Interest 
higher than that assumed as a basis for determining the premiums. Second. 
Mortality less than that called for by the tables on which the premiums are 
based. Third. That portion of the margin, or loading, added to the net pre- 
mium, not required for expenses or contingencies. While these are not the 
only sources of past gains to policy-holders, yet they are the principal, and 
are likely to be the abiding sources in the future. No distribution of surplus 
can be equitable unless each source of surplus is carefully considered. Since 
the proportions of the surplus from each of the above sources differ widely 

* An extensive article on this subject, without the use of the algebraic symbols, may be 
found in the Agent's Manual of Life Assukance, by the same publishers. 



METHOD OF DIVIDING SURPLUS. 525 

on policies of same amount, but issued at different ages, and on different con- 
ditions and terms, it follows that any pro rata distribution must of necessity 
be unjust. For instance, the surplus arising from excess of interest should be 
divided amongst policy-holders in proportion to the amount of money in the 
hands of the Company, held on account of the several policies, or, in other 
words, in proportion to the Reserves for reinsurance. Now, since these Re- 
serves depend not only upon the age at issue, terms and conditions of the in- 
surance, and also of the payments, but increase in every case each year, it 
follows that the surplus from this source will be as variable as are the ages 
of the insured, or the terms and conditions of the policy. Hence, any attempt 
to divide this portion of the surplus, in proportion to 'premiums paid, is simply 
absurd. Again, surplus arising from greater vitality depends, also, not only 
upon the age of the person insured, but also upon the amount actually at risk, 
so that the surplus arising from this source varies also with the terms and 
conditions of the policy. Thus, as the Reserve increases, the amount at risk 
diminishes, and the cost of insurance may, and in many cases actually does, 
decrease each year, notwithstanding the increased age of the insured. By 
means of the ' Contribution' plan, each source of surplus is separately and 
carefully considered, and the dividends are simply and solely a restitution of 
surplus premiums in the proportions overpaid by each person. 

" Let (1 -fr)"=The amount of $1, at the end of n years, according to the rate 
of interest on which the premiums are based (generally 4 
per cent.). 
Ig/t+m etc. = Numbers living at ages, x, x+n, etc., according to the Table 
of Mortality from which the premiums are deduced. 
d x d x+n , etc.=Numbers dying annually at age x, x + n, etc., out of the num- 
bers living as above, according to the same table. 
^ x =:The net annual premium at x to insure $1, according to the 

Office Table as above. 
P x =The premium actually charged to insure $1. 
R x+B =The Reserve for re-insurance or net value of a policy of $1, 
issued n years previously at the age of x, just before the 
payment of the premium then due. 
R, +n+ i=The Reserve at the end of the year for the same policy. 

■% x+n =:Th.e Contribution to Surplus or over-payment on a policy of 
$1 issued at age x, n years previously. 

" Let us now take the most simple case, namely, that of a company consist- 
ing of l x+n persons insured n years previously at the age of x for $1 each. 
Let us further suppose, for the sake of simplicity, that there are no expenses, 
that each person pays the net premium (fi x ) only, that the net values of the 
policies are reserved, and that the rates of mortality and interest actually ex- 
perienced are precisely the same as those indicated by the Office Table of 
Mortality. 

" The company then commences the year with an amount equal to the net 
value of the policies, (4 + „R»+») and receives in advance the annual premiums 
on the same (? x +nfi x )> both of which sums are immediately invested at the rate 
of interest anticipated. In the course of the year there will be a certain 
number of deaths (d x+n ), on account of which the company will pay $1 each, 
and finally the company must have a sufficient fund at the end of the year to 
reinsure the remaining policies (/, +B+1 R„ +B+1 ). If the premiums are correctly 
calculated and the other conditions are fulfilled, it is evident that the funds 
will be just sufficient, no more and no less, to meet the obligations for the 
year. Hence we now obtain what may be called the Equation of Equilibrium, 
as follows : 

^+n^ x +nO- + r) + / x+n p x (l + r)=d x+n + / x+n+1 R x+n+1 , or, substituting for £+*+, 
its t equivalent f x+n —d x+n , we have 



*+n+l 



526 METHOD OF DIVIDING SURPLUS. 

4 +n R, +B (l + r) + 4 + „A(l + r)=d x+n + (l x+n —d x+n )R 
or 
4+„R,+»(l + r) + / x+ ^(l + r)=^ +n (l— R, 

" Dividing now tliis last equation by l x+n , the number living, and transposing, 
we liave, as the Equation of Equitable Balance for each person 

R, + »(i +^)+A(i+^)-^(1-R^» +1 )-R,-h. +1 =^ 

" This equation may be deduced directly from the well-known formula for 
finding the value of a policy. Thus, adopting the usual notation, and refer- 
ring to the admirable paper by Mr. Peter Gray, ' On the Construction and Use 
of Commutation Tables,' in the London Journal of the Institute of Actuaries, 
vol. x. (a work which no life insurance company should be without), for more 
particular explanation and demonstration of each step in the argument, we 
nave 

R x+n =A x+n -£ x (l + a x+n )=^-^ x ^ 

A J, /I i „ \ •"-*-'+ n + 1 . N*+,,+l 

*+n+l — Ax+n+1— p x (l -J- a x+n+i ) — ^ 'P*Y\ 

" Multiplying the first equation by (1 + r)=-, we have 

v 

but M x+n =C x+n +M x+n+1 (Assur. Mag., vol. x. p. 95), hence, multiplying by 

R, +B (l + r)vD n+n = C x+n + M x+n+1 —p x N n+n 
but R x+n+1 D x+n+i = M x+n+1 —^ x N x+n+1 

Subtracting, we have, since N x+n — N x+n+ .i = D x+n 
R x+n (l+r)vD x+n —R xW D x+n+1 =C x+n —p x D x+n but 
"D x+n+1 =vT) x+n — C x+n , (Assur. Mag., p. 96), hence 

^ + n(l + r)vD x+n -R x+n+1 (vD x+n --C xfn )=C^-jP t D a+n 
Dividing by vD x+n , we have, since 

C x+n== d x +n v* + * + 1 ^d x+n 
^D, +n vl x+n v*+ n l g+n 

R x+n (l + r)-R x+n+1 +^ n R x+n+1 =f^-^ x 0~ +r) 

or 
R^(l+r)+A(l +r)-^(l-R x+ ^)-R x+n+1 =o 

*x+n 

" This last equation is susceptible of the most general application — by suit- 
able modifications applying as well to the most complicated cases of survivor- 
ships, joint lives, etc., as to the most simple forms of paid-up insurance. 

" Let us now examine the practical application of this principle. Substitu- 
ting in the equation, the facts of actual experience for the theoretical assump- 
tions, it is evident that, if the former are more favorable than the latter, there 
will be over-payments, or contributions to the surplus fund, at the end of each 
year, and also that these over-payments or contributions will be affected by 
any departure from the theoretical assumptions, in reference to mortality, in- 
terest, etc. Adopting the same notation as before, with the addition of an 
accent to distinguish actual facts from theoretical assumptions, and represent- 
ing the proportionate expenses by e, we have the general practical equation, 



METHOD OF DIVIDING SURPLUS. 527 

R x+n (l +r') + (F— *)(l + 0— y^O— R^+i)- K+« + i=X* ^Contribution to 

* x+n 

Surplus. 

" The equitable apportionment of the expenses of business among the various 
policy-holders, especially when the sum total of the contributions is greater 
than the total Surplus to be divided, is a difficult and delicate problem, upon 
which no specific directions can be given — the peculiarities of each company 
requiring special treatment. 

" In the ' Mutual Life,' the investments have yielded 7 per cent, interest net, 
instead of 4 per cent, as was assumed — the mortality has been far less than 
was anticipated (although not equally so at all ages), while the miscellaneous 
profits have been sufficient to cancel the entire expenses of conducting the 
business. The over-payments or ' contributions' in the case of each policy 
for the present Dividend have been computed by means of the following for- 
mula, which we may call the Equation of Equitable Distribution : 

R x+n (1.07) + P,(1.07)-^(l-R* +n+1 )— R, +n+1 =^ +n 

* *-t-n 

" Thus we see that each person derives the full benefit (to which he is surely 
entitled) from the excess of interest on that portion of the assets of the Com- 
pany belonging to himself exclusively, namely, the value of his policy, the same 
having been reserved from his own previous payments. This point, although 
of vital importance in an equitable distribution of surplus, is totally disre- 
garded when the surplus is divided in proportion to premiums paid — in which 
case that portion of the surplus arising from excess of interest, belonging to 
policy-holders in widely different proportions, is divided amongst them all 
pro rata, to the manifest injury of those who have been longest insured. 
Since the miscellaneous profits have been sufficient to cancel all the expenses 
of business, we are enabled to credit each person with the full premium paid 
at 7 per cent, interest, [P*(l-07)] without deduction for expenses. Finally, the 
results of experience have been carefully collated and studied, and a Table, 
accurately adjusted, has been prepared, showing the actual rates of mortality 

at the several ages, I x+n etc. j by means of which each person has been as- 



for the payment of claims during the year, in proportion to the amount 
actually at risk (for each dollar of insurance) upon his own life (1 — R x+n+1 ). 

" The Dividend Additions on all policies in this Company also participate in 
the Surplus as separate, paid-up insurances. The resulting contributions both 
from policy and additions obtained by this process, on the four principal kinds 
of policies, at age of 37 at issue, may be seen by reference to the Tables 
on pages 30 to 33, which were prepared expressly to illustrate the progressive 
nature of dividends based upon this plan. 

" These results are not to be taken as guarantees or promises for the future, 
as we can scarcely hope for a long continuance of such, favorable conditions. 

" It is thus seen that, by the ' Contribution' plan of division, not only is each 
source of surplus carefully considered, but any errors or inequalities in the 
rates of premium are at once detected and adjusted. It is now generally 
recognized by the best authorities as the only equitable plan of dividing sur- 
plus, and has already been adopted by many of the best American companies. 

" The same principle applies in determining the true measure of the interest 
of each person in the funds of a life insurance company. Thus, the value of a 
policy on surrender has always been determined by deducting the present 
value of the future premiums from the present value of the sum assured. 
That is to say, the value of a policy has heretofore been considered the same 
as the Reserve for reinsurance. The difference between what has well been 
called the retrospective and the prospective values, has been overlooked. The 
true value on surrender, or the true measure of the interest of a policy-holder 
in the funds of a company, is not correctly obtained by discounting t'^e future, 



528 CHAMBER OP LIFE INSURANCE FIRST REPORT. 

but by considering the actual facts of past experience. The difference between 
the amount, at compound interest, of the payments (less expenses) and the 
to tal cost of the insurance is evidently the true value of a policy. Thus at the 
end of the first year 

(P,-*) (1 + r')-^(l-R, + j= Xl+1 + R x+1 V i+ 

& x+o 

" At the end of the second year, if the surplus of the first year has not been 
paid out, the value of the policy is 

(P x -e) (1 + r7-^±-°(l-R, +1 ) (1 + r>) + 

£ x+o 

(P x -^)(l+/)^±- a (l-R, +2 )=V, +2 =^ +1 (l+r')+A:, f2 +R, +2 



" The fact that the true value of a policy can only be thus determined fur- 
nishes an additional argument for the adoption, by all companies, of the Con- 
tribution plan of dividing surplus." 

CHAMBER OF LIFE INSURANCE. — FIRST ANNUAL REPORT OF THE 
EXECUTIVE COMMITTEE : PRESENTED NOY. 1867. 

The Chamber of Life Insurance was founded in the city of New- York, at 
the Rooms of the Chamber of Commerce, on the twenty-first day pf Novem- 
ber, 1866. Originating in that desire for organized cooperation which distin- 
guishes every civilized people, it was formed under the immediate direction 
or advice of philanthropic men, who had, in several cases, devoted a quarter 
of a century to the beneficent objects which it represents. Union, mutual im- 
provement, the promotion of the best interests of each one of the united body, 
the security of the great trusts involved, the stability of the business, and the 
perpetuity of the institutions associating together, were the objects impelling 
its founders to establish the Chamber. Some of the venerable men who aided 
in person or by counsel in founding it, have already been called hence, leaving 
other noble monuments besides these institutions, which shall long preserve 
the memory of lives of self-denying labors to meliorate the sufferings of the 
unfortunate or to elevate mankind. 

Much diversity of views prevailed at the meetings preparatory to the organ- 
ization. But this was wisely tolerated, being inseparable from freedom of 
opinion ; and a controlling desire to promote the common welfare was che- 
rished by all the delegates. Minor points of difference were forgotten or aban- 
doned, and all diligently sought out those prominent or leading considerations, 
which should induce harmonious action. The result was complete unity of 
sentiment, with an organization free from discordant elements. To secure 
efficiency in carrying on the business of the Chamber, the constitution pro- 
vided for an Executive Committee of nine members, to serve for one year. 
This Committee, in resigning their trust, submit the following report : 

" In entering upon their duties, the Committee sought out other organiza- 
tions interested in securing the widest possible field for that law of average 
which governs, with so much power, in every kind of insurance, most power- 
fully in life insurance. These organizations hailed this Chamber with many 
kind expressions of encouragement ; they furnished every desired information 
or facility for gaining a perfect knowledge of the work to be done. Several 
modes of action, all feasible, were discussed by the Committee ; the decision 
being in favor of an independent course, as most likely to prove more bene- 
ficial in promoting the objects of the Chamber, than alliances with those en- 
gaged in other branches of insurance. In making this decision in favor of 
independent action, however, your Committee expressed cordial sympathy 



CHAMBER OF LIFE INSURANCE FIRST REPORT. 529 

with the other organizations which were and are sustaining the same com- 
mon objects. 

" Correspondence with the several companies of the Chamber, as well as with 
companies not in the Chamber, resulted in establishing the fact that nearly 
all desired that a suit at law should be instituted, in a case designated and 
agreed upon in the correspondence, to test the constitutionality of State laws 
deemed outrageously oppressive and unjust toward, if not destructive of, the 
business of Life Insurance. The cost and expenses of this suit having been 
provided for by the generous enthusiasm of nearly all the companies who 
pledged themselves therefor, your Committee deemed that the action of the 
Chamber at the meeting last year, or the sentiments then expressed, would 
sanction their support of another suit, then already commenced in another 
State ; this support was accordingly tendered, but the proceedings in a lower 
court having been interrupted, your Committee declined to proceed de novo, 
and thus there remains only the first-named suit, now going forward with all 
possible expedition, instituted under the direction of your Committee. This 
case is now in the Circuit Court of the United States, it being understood be- 
tween the authorities of the individual State interested and your Counsel, that 
it shall be carried as directly or as speedily as they can into the Supreme 
Court of the United States, for final adjudication. Preparatory to this suit, 
protests were made in due form prepared by counsel against the exactions of 
the State in question. Your Committee furnished forms of protest to every 
company wishing copies, and they may be obtained upon application by any 
company desiring to use them in that or any other State making similar 
exactions. Such protests are deemed important only because the making of 
them may facilitate reclamations if the suit results favorably. 

" Correspondence with State officers, in charge of insurance affairs, has result- 
ed in calling forth enlightened, statesmanlike views from several of them in 
support of the objects of your Chamber. Some have offered their individual 
efforts in behalf of these objects, and your Committee are encouraged to believe 
that further correspondence in this direction, with a plain exposition of the 
objects sought, will go very far toward a general harmonizing of the laws of 
the individual States. Massachusetts, with the zealous support of her Insu- 
rance Commissioner, has changed the day for making the annual reports from 
November to the 1st of January, so as to correspond with the date required by 
the State of New- York and several other States. It is to be hoped that all the 
States will speedily adopt the same date, and thus establish the calendar year 
as the financial year for valuations and returns by each company to its own 
and every other State ; for in fixing upon this uniformity of date, besides the 
saving of the expense of making as many returns throughout the year as 
there are States in the Union, the States will initiate a unity of sentiment by 
which other and grander results will be accomplished. 

" Your Committee have found, in their correspondence, that a more extended 
knowledge of life insurance is greatly needed in some States, where legis- 
lators, usually well informed upon all the great questions of the day, view it 
much in the same light in which the business of rum -selling is viewed, as a 
business to be severely taxed or stringently licensed, if not absolutely prohi- 
bited. The facts of the case are disregarded by such legislators. The twelve 
hundred millions of dollars now insured, generally for the benefit of dependent 
families, is a sum which they either ignore or are ignorant of. They either 
forget or do not know this other great fact — that life insurance is now distri- 
buting more than six millions of dollars a year, mostly to widows and or- 
phans. The misery and suffering thus averted should enter into the calcula- 
tions of enlightened statesmanship— should count for something. Is it not 
of incalculable importance to society that thousands of children are thus saved 
from pauperism to become useful men and women ? These children thus 
saved through the instrumentality of life insurance, are to be found in all 
parts of our country ; and in the remote future, if not in the near, we may con- 
fidently hope that their influence will be felt in every State capitol in favor of 
more enlightened legislation on the subject of life insurance. 



530 CHAMBER OF LIFE INSURANCE — CONSTITUTION. 

" We ask no abandonment of their rights by the States. We ask no privi- 
leges to do wrong ; on the contrary, we solicit the most searching scrutiny, 
the most thorough investigation of our condition. We are anxious to prove 
ourselves worthy of the public confidence. This anxiety flows from the high- 
est dictates of self-interest ; for if any one company should, from any cause 
that might have been foreseen, forfeit that confidence, we must deplore it as 
a calamity to the members of that company, as well as to the several compa- 
nies. We therefore appeal, individually and collectively, to the separate 
States to regulate the business wisely, giving us the widest possible field for 
usefulness, so that we may secure that general average mortality among our 
members which is afforded by the wide extent of our common country, and be 
enabled to carry out most perfectly the benevolent objects of the business in 
which we are engaged. This appeal is not made in the selfish interest of any 
one State ; it is made in the common interest of all the institutions of the se- 
veral States. We ask that these may be permitted to go reciprocally into the 
States of each other. It is an exchange of location, not exclusive jurisdiction, 
that we ask. It is the right to reciprocal benefits that we plead for, not a mo- 
nopoly of privileges. We, each in our several States, are anxious to secure 
for those from other States what we ask of them. We ask that, as we do to 
others, so they will do to us. 

" We plead for reciprocity in and between the States, for the sake of the 
great cause we have at heart. We, who are now entrusted with the man- 
agement of these institutions, are passing away. In a few short years 
our places will be filled by others, but the companies will remain. The com- 
panies have been founded for the generations and the ages to come. Indi- 
viduals will continue to pass away in the procession of generations down the 
stream of time ; but the generations remain, each succeeding the other, and 
each one in its turn constantly recruited, ever active, ever young, ever busy. 
For them we plead. We ask that they may have these institutions secured 
to them upon the lasting foundations of an enlightened State policy." 

CONSTITUTION OF THE ACTUARIAL BOARD OF THE CHAMBER OF 

LIFE INSURANCE OF THE UNITED STATES. 

(ADOPTED may' 20, 1868.) 

Art. I. The actuarial board shall consist of the actuaries or advisory actuaries of the se- 
veral companies, members of the chamber, together with one actuary-in-chief, not an actu- 
ary or advisory actuary of any life insurance company, to be appointed by the chamber. 

Art. II. Sec. 1. The actuarial board shall annually nominate two of their number for ap- 
pointment by the chamber, who, if approved, with two officers of companies, members of 
and appointed by the chamber annually, and the actuary-in-chief, shall constitute an execu- 
tive board of actuaries, whose duty shall be to superintend, under the general supervision 
of the actuary-in-chief, the actuarial business of the chamber, under such rules, regulations, 
and instructions as may, from time to time, be adopted by the chamber. 

Sec. 2. The board may employ such assistants to the actuary-in-chief as maybe necessary, 
whose compensation, together with that of the chief, shall be fixed by the chamber. 

Sec. 3. The actuarial board shall cause to be prepared, and furnish to every company, 
such blank forms as they may deem necessary for a report of data by the companies, which 
will enable the executive board to determine the true condition of said companies. 

Art. III. Sec. 1. Upon receiving the report of the companies, the executive board shall 
proceed to an examination of the condition of every company making a report. They shall 
report the condition of every company to the chamber, either at stated meetings of the cham- 
ber, or at any special meeting called for hearing such report. 

Sec. 2. The executive board shall not report to the chamber any company as being insol- 
vent under the rules established by the chamber, without previous notice to such company 
in writing. On such notice being served upon any company, it may appeal to the actuarial 
board, and, upon sufficient cause, the actuarial board shall appoint a special committee of 
three of their number to revise the work of the executive board. 

Sec. 3. The special committee to revise the work of the executive board shall immediately 
upon their appointment proceed to review the action of the executive board, and report the 
result of their proceedings to the actuarial board. If such report be favorable to the appel- 
lant and receive the approval of the actuarial board, such approval shall be a stay of further 
proceedings, but if unfavorable, then the condition of the appealing company shall be reported 
to the chamber. 

Art. IV. Sec. 1. The actuarial board shall annually, on or before the yearly meeting of the 
chamber in November, elect one of their number chairman, and nominate to the chamber 
two of their number for election by the chamber as members of the executive board. In 



TRANSMITTED LONGEVITY. 531 

case of the non-approval by the chamber of any person thns nominated, the actuarial board 
shall nominate another person, until persons acceptable to the chamber be found to fill 
such positions as members of the executive board. 

FACTS IN HUMAN LIFE. 

The number of languages spoken in tlie world amounts to 3,064. The in- 
habitants of the globe profess more than 1,000 different religions. The num- 
ber of men is about equal to the number of women. The average of human 
life is about thirty-three years. One quarter die previous to the age of seven 
years, one half before seventeen, and those who pass this age enjoy a felicity 
refused in one half of the human species. To every 1,000 persons one reaches 
100 years of life ; to every 100 only six reach the age of sixty-five ; and not 
more than one in 500- lives eighty years of age. There are on earth 1,000,000,- 
000 inhabitants ; and of these 33,333,333 die every year, 91,824 every day, 
3,730 every hour, and sixty every minute, or one every second. These losses 
are about balanced by an equal number of births. The married are longer- 
lived than the single, and above all, those who observe a sober and industrious 
conduct. Tall men live longer than short ones. Women have more chances 
of life in their favor previous to being fifty years of age than men, but very few 
afterwards. The number of marriages is in the proportion of seventy-five to 
every 1,000 individuals. Marriages are more frequently after the equinoxes ; 
that is, during the months of June and December. Those born in spring are 
generally more robust than others. Births and deaths are more frequent by 
night than by day. The number of men capable of bearing arms is calculated 
at one-fourth of the population. 

THE CRITICAL PERIODS OF HUMAN LIFE. 

Prom the age of forty to that of sixty, a man who properly regulates him- 
self may be considered as in the prime of life. His matured strength of con- 
stitution renders him almost impervious to the attacks of disease, and expe- 
rience has given his mind the soundness of almost infallibility. His mind is 
resolute, firm, and equal ; all his functions are in the highest order. He 
assumes the mastery over business ; builds up a competence on the foundation 
he has formed in early manhood, and passes through a period of life attended 
by many gratifications. Having gone a year or two past sixty, he arrives at 
a critical period in the road of existence ; the river of death flows before him y 
and he remains at a stand-still. But athwart this river is a viaduct, called 
" The Turn of Life," which, if crossed in safety, leads to the valley " Old Age," 
round which the river winds, and then flows beyond without a boat or cause- 
way to effect its passage. The bridge is, however, constructed of fragile 
materials, and it depends upon how it is trodden whether it bend or break. 
Grout, apoplexy, and other bad characters, are also in the vicinity to waylay 
the traveller, and thrust him from the pass ; but let him gird up his loins, and 
provide himself with perfect composure. To quit a metaphor, the " Turn of 
Life " is a turn either into a prolonged walk or into the grave. The system 
and power having reached their utmost expansion, now begin either to close 
like flowers at sunset, or break down at once. One injudicious stimulant — a 
single fatal excitement — may force it beyond its strength ; whilst a careful 
supply of props, and the withdrawal of all that tends to force a plant, will 
sustain it in beauty and in vigor until night has entirely set in. 

TRANSMITTED LONGEVITY. 

Some very curious facts have recently been announced in regard to dis- 
coverable signs of long life. This has resulted from scientific investigations 
set on foot by a life insurance office. The most interesting feature in a learned 
series of essays on the physical signs of longevity in man, is the announcement 
that short persons live longer than tall ones ; and women, on an average, all 
other things being equal, live longer than men. Married persons of both 
sexes have a longer expectation of life than the unmarried ; and unmarried 



532 LIFE INSURANCE FOE THE POOR. 

women live longer, on an average, than bachelors, yet both fall short, of the 
amount of life they both might reasonably hope for in matrimonial relations. 
Longevity is transmitted in some families. Physiology has not been able to 
explain the conditions on which it depends, but medical writings and vital 
statistics establish the fact beyond contradiction, that a length of days is an 
actual inheritance. 

THE SOLICITOR. 

The idea that soliciting is not as honorable — that a man stands higher in 
community as a general agent than as a solicitor, is pure and simple bosh. 
Holland says the three grades of aristocracy in this country are, blood, brains, 
and bullion ; now, if a solicitor makes the bullion, we will vouch that he has 
the brains and blo'>d. Other things being equal, money is what gives a man 
position ; and we can point to solicitors who last year earned more money on 
commission than any general agent in the land ; and that, too, on first year's 
business. Whenever a man finds within him a power to prevail on men to 
take out policies of insurance on their lives, his fortune is made ; and he had 
better never turn aside to the right or left, but go on fighting steadily on this 
line. Talk about honor ! this man is a royal prince. — Spectator. 

THE CANADA LIFE INSURANCE LAW. 

The Dominion has at last a law providing for the deposit, by life insurance 
companies, of the sum of $50,000 for the benefit of Canada policy-holders ex- 
clusively ; or, if that be contrary to their charters or to State law, for the 
benefit of all. The deposit of $50,000 is to be further increased each year by 
the deposit of Canada premiums until the whole amounts to $100,000. Com- 
panies not compelled to publish statements of their business at home, and not 
wishing to show their condition, can conceal the same by the deposit of $150,- 
000, and by making an exhibit of business done in Canada. The deposit may 
be made in cash, or in any State or Government bonds, which must, within 
three years, be converted into cash. The law makes it imperative on the 
Finance Minister to invest the cash, when received, in Dominion stocks. The 
deposit can be withdrawn only by consent of the Governor and Council. The 
only practical effect of the law is to secure a loan to the Dominion Govern- 
ment from every life company wishing to do business there. The value of 
such a loan to the companies is, perhaps, rather questionable, when the Cana- 
dian Government has to force its stocks upon the market upon such a pretext. 
Wisconsin tried the same thing once and failed, and Canada is not likely to 
improve upon the experiment. 

LIFE INSURANCE FOR THE POOR. 

An annual account, laid before Parliament, of the operation of Mr. Glad- 
stone's scheme of 1864, states that, at the close of the year 1867, the following 
contracts, made through the Post-OfRces, were in existence : — 1,485 Life In- 
surances, for sums amounting to £111,437 ; 545 immediate Life Annuities, 
amounting to £12,246, and 137 deferred Annuities, amounting to £2,574. The 
year's charges of management amounted to £433, from which should be de- 
ducted £328, received in fees on the grant of annuities ; but a charge of £80 
should be added for the year's share of the preliminary expenses. Thus busi- 
ness to the aggregate amount of £126,257 (nearly $700,000) was transacted, 
at a charge of only £513 (or $2,500), £328 of which was repaid in fees, so that 
the net deduction for management would amount to only £275. 



OCCUPATION AND LONGEVITY. 



533 



THE INFLUENCE OF OCCUPATION ON LONGEVITY VALUABLE 

FACTS AND FIGURES. 

EXTRACTED FROM THE WRITINGS OP GEORGE M. BEARD, M.D. 

It is obvious that health and longevity must depend very materially on the 
occupation. In civilized lands we all lead lives more or less artificial, shaping 
or narrowing our activities according to the varying demands of advancing 
society. " Lead a natural life " is a convenient form of rhetorical advice, but 
practically it can mean nothing more than to make the wisest selection of the 
benefits of civilization. 

An ideal occupation, consisting in every way with the healthiest and most 
enduring development of all the faculties, would require four conditions : 

1. It would admit of the harmonizing development of the whole nation. 

2. It would be congenial to the taste. 

3. It would admit of system. 

4. Its pursuits would be calm and unworried. 

Now, it is evident that, taking the world as we find it, such an ideal occu- 
pation cannot exist ; in no pursuit that men follow for maintenance, or even 
for dignity merely, is it possible to conform, any .more than approximately, to 
the ideal laws of hygiene. 

Such being the case, we are compelled to form our estimate of the compara- 
tive healthfulness of different occupations by the results of observation and 
statistics. Assuming that all the pursuits in which we are engaged are more 
or less removed from the ideal supposed, we ascertain by theory and calcula- 
tion which are, on the whole, the most favorable to health and longevity. 



Classes of Occupations. 



No. 

of 
Occu- 
pations, 



Cultivation of the earth 2 

Active mechanics abroad. . .11 
" " in shops. .52 
Inactive mechanics in shops 18 
Mechanics, trades not speci- 
fied — 



No. 


Av. 


of 


Lon- 


Deaths. 


gevity, 


i. 


Years. 


11,741 


64-02 


3,376 


48-24 


4,431 


46-56 


4,628 


41-85 


504 


43-22 



Laborer! 
Others 1 
Professii 
Merchants 





No. 


No. 


Av. 


of Occupations. 


of 
Occu- 


of 
Deaths. 


Lon- 
gevity, 




pations. 


Years. 


3d on the ocean 


.... 1 


2,785 


46-08 




.... 6 


8,372 
862 


44-63 


aboring abroad 


....19 


43-57 


onal men 


....10 


1,382 


52-58 


its, financiers, 


capi- 








....15 


3,574 


48-39 



The same observer also prepared the following tabular statement of the ave- 
rage longevity in some leading occupations in Massachusetts, New- York, and 
Rhode Island : — 



Occupations. Deaths. 

Clergymen 389 

Lawyers 276 

Physicians 540 

Coopers 338 

Blacksmiths 822 

Carpenters 2,052 

Masons 492 



Average 
Longevity. 
55-36 
54-26 
54 32 
57-04 
5151 
49-72 
48-29 



Occupations. Deaths. 

Tanners 230 

Merchants and clerks. .2,386 

Cabinet-makers 253 

Shoemakers 3,233 

Painters 500 

Tailors 486 



Average 
Longevity. 
4790 
47-46 
46-34 
4303 
43-37 
41-08 



The Register of the city of Boston has the following table of ages of seven 
hundred and six men, in the principal professions and trades, who died in 
1855 :— 



Av. Age. 

305 Laborers 40'30 

69 Mariners 38-59 

35 Tailors 39"08 

32 Merchants ..58-81 
3 Traders 49 "68 

33 Carpenters.. 45-76 
22 Painters 40-36 



Av. Age. 

8 Farmers 57*12 

6 Ship - carpen- 
ters 51*16 

5 Physicians ..48-80 
5 Clergymen.. 53- 80 

4 Coopers 40-50 

45 Clerks 32'98 



Av. Age. 
20 Shoemakers.. 2435 
15 Teamsters.... 34 40 
12 Gentlemen.. .5983 

11 Printers 3945 

10 Masons 40'20 

9 Machinists... 33 -77 



Av. Age. 

8 Bakers 3862 

7 Blacksmiths.. 35-00 
4 Curriers 28 50 

4 Engineers... 45-75 

5 Lawyers 60*20 



In the twenty-second registration report of Massuchusetts for 1863, I find 
a very carefully prepared table, showing the number and average ages of all 



534 



OCCUPATION AND LONGEVITY. 



persons over twenty years of age, whose occupations were specified, and 
whose deaths were registered during a period of twenty years and eight 
months, from May 1st, 1843, to December 31st, 1863. As the number of 
persons whose occupations and average ages are there given is upward of 
seventy thousand, this record is the most important contribution to vital sta- 
tistics that has ever been made. I append the statistics of the most important 
representative employments. 



Occupations. ^ A J 

All classes of occupations 77,188 50 - 64 

1. Cultivators of the earth 19,252 64-13 

2. Active mechanics abroad 5,745 50*73 

Brickmakers 49 4918 

Carpenters 3,202 50*93 

Calkers and gravers 98 62*34 

Masons 801 49*07 

Ship-carpenters 518 56*60 

Stone-cutters 477 45*79 

Tanners 410 47-44 

3. Active mechanics in shops . . 7,025 47.99 

Bakers 254 45-08 

Blacksmiths 1,398 52-66 

Brewers 7 49-S5 

Card-makers 26 4604 

Carriage-makers v 134 50'12 

Chair-makers 55 39*73 

Confectioners 35 40*63 

Cooks 47 40-89 

Coopers 545 55-80 

Curriers 52 4523 

Cutlers 58 37*46 

Distillers 16 5612 

Dyers 80 42*39 

Founders 145 42*00 

Furnace-men 56 3918 

Glass-blowers 73 37*78 

Hatters 217 54*83 

Leather-dressers 83 45*00 

Machinists 933 39*94 

Millers 154 58-08 

Musical instrument makers.. 9 36.11 

Paper-makers 151 46*47 

Plumbers 36 35-61 

Potters 23 57*52 

Tallow-chandlers 37 53 75 

Tinsmiths 191 39*93 

Weavers 207 44*99 

Wheelwrights 301 54-50 

4. Inactive mechanics in shops. 8,867 42 - 68 

Barbers 184 42*05 

Basket-makers 89 6162 

Bookbinders 67 37*57 

Carvers 30 30*87 

Cigar-makers 58 36*90 

Clock (and watch) makers. . . 43 61.35 

Engravers 50 41*52 

Jewelers 233 39*44 

Operatives 815 37*63 

Printers 336 36*98 

Shoemakers 5,469 43*34 

Tailors 759 43*35 

Tobacconists 24 50*75 

5. Laborers — no special trades . .14,733 45*93 

Brakeraen 76 26*80 

Drivers 138 40*29 

Laborers 14,351 4613 



Occupation,. „££ & 

Workmen in powder-mills .. . 16 40*12 

6. Factors laboring abroad 2,920 37*36 

Baggage-masters 16 32*56 

Butchers 264 50*60 

Firemen and engineers 192 36*74 

Expressmen 86 3S*69 

Lighthouse keepers 8 57*37 

Sextons 30 56*83 

Soldiers 1,230 28*96 

Stablers 165 41*57 

Teamsters 530 40*45 

Weighers and gaugers 724 60 '33 

7. Employed on the ocean 5,020 45*67 

Fishermen........ 79 47*09 

Marines 1 5S*00 

Naval officers 20 53*15 

Pilots 43 60*46 

Seamen 4,927 45-48 

8. Merch'ts, financiers, ag'ts,etc. 7,272 47*92 

Bankers 3 5866 

Bank officers 67 54*45 

Brokers, : 73 51*45 

Clerks 1,293 3339 

Druggists 105 39*60 

Gentlemen 787 04*61 

Grocers 192 48*31 

Manufacturers 652 47*62 

Merchants 1,913 52*70 

R. R. conductors and agents. 131 38*54 

Traders .1,521 46 81 

9. Professional men 2,679 50*24 

Artists 66 48*70 

Civil engineers 55 41*91 

Clergymen 472 59*25 

Comedians 79 41*63 

Dentists 52 39*33 

Editors 35 45*37 

Judges and justices 9 63*11 

Lawyers 374 5611 

Musicians 126 40*66 

Physicians 675 55*86 

Professors 22 55*81 

Public officers 250 53*81 

Surveyors 55 48*00 

Teachers 312 38*71 

10. Females 3,625 4613 

Domestics 303 47*21 

Dressmakers 118 41*75 

Housekeepers 2,264 50*11 

Milliners 65 3903 

Nurses 41 60*90 

Operatives.... 413 28*23 

Seamstresses 139 44*19 

Shoe-binders 33 41.79 

Straw-braiders. 28 37*28 

Tailoresses 119 4313 

Teachers 129 2912 



In the eleventh registration report of Rhode Island for 1863, the average 
ages of those who died during that year in that State are given, with their 
respective occupations, the ages under twenty being excluded. 

As the whole number specified is less than eight hundred, the results are 
not very conclusive ; in some of the trades only one or two cases of deaths are 
recorded. I select those that are of the greatest importance in a statistical 



OCCUPATION AND LONGEVITY. 



535 



Av. 

Age. 
65.22 

60-84 
57-37 


Occupations. 

3. Laborers : — 
Laborers 

4. Business men : — 


No. of 
Persons. 

141 

10 


Av. 

Age. 

48-56 

47-80 


39-41 

57-85 
53-91 


Merchants 

5. Seafaring men: — 


39 

16 


54-33 

38-81 


49-60 









point of view, omitting all such as do not present a sufficient number of 
deaths to be of value : — 

Occupations. P ? r °ong. 

1. Agriculturists 147 

2. Mechanics and artisans : — 

Blacksmiths 13 

Carpenters 24 

Jewelers 12 

Machinists 14 

Shoemakers 12 

Weavers 10 

These are all the statistics in regard to the occupations of this country that 
I have been able to obtain, and are, I believe, all of any importance that exist, 
or have been prepared in the United States, with the exception of a few obser- 
vations of the longevity of special classes, which will appear under thei:* 
appropriate heads. 

Let us now compare the reports of the English Registrar-General with that 
of Massachusetts and Rhode Island. The first registrative report of England 
was published in 1838, since which time there has been continued progress in 
the system of arrangement and collation. 

Dr. Caspar, of Berlin, and Dr. Guy, of London, both wrote on the subject of 
the relation of occupation to health and longevity ; but, inasmuch as very few 
statistics had at that time been gathered, their speculations are of no great 
value. Ramaggim O. Thackeray gave some advice to artisans by which they 
might in a measure counteract the evil effects of their callings. 

But by far the best work on this subject that has yet appeared on either 
side of the Atlantic, is a small book written by Dr. Thackerah, an eminent 
surgeon of Leeds, and published in 1832. Although he had few figures to 
aid him. his book is of great value, both for the compass and accuracy of its 
general observations, and for the originality and clearness of its ideas. 

In 1857, Dr. Neison published a large work on vital statistics, the main 
object of which was to present the mortuary facts of the friendly societies of 
England, and also of the medical profession. 

Dr. Farr, Registrar-General of England, in his fourteenth annual ' report, 
made some important statements in regard to the ages of men dying in dif- 
ferent employments. From a careful examination of his tables, I am con- 
vinced that they are in the main corroborative of the experience of the regis- 
trars of Massachusetts and Rhode Island. 

Of those that died in England in 1851, the different classes stand thus in 
order of mortality : — 



1. Farmers. 3. Weavers. 

2. Shoemakers. 4. Grocers. 



5. Brcksmiths. 7. Sailors. 

6. Carpenters. 8. Laborers. 



9. Miners. 
10. Bakers. 



11. Butchers. 

12. Innkeepers. 



It thus appears that miners, bakers, butchers, and innkeepers, experienced 
the heaviest mortality. In regard to the professions he states that the per- 
centage of death is less or at least not greater than that of the average in all 
the employments, as we have seen to be the case in this country. 

In Dr. Neison's report I find the following table, showing the expectation 
of life of the clerks, plumbers, bakers, and miners of the friendly societies of 
England : — 



ges. 


Clerks. 


Plumbers. 


Bakers. 


Miner 


20 


31-83 


36-50 


40-02 


40-67 


30 


27-57 


30 50 


32-35 


33-15 


40 


21-83 


24-30 


24-07 


24-42 



Such, then, are the leading statistical tables that we have been able to 
obtain from the English and Arrerican reports. Although a system of regis- 
tration was inaugurated in Geneva in 1549, and in Sweden in 1751, yet no 
comparison of the relative longevity in the different occupations has been 
made in any European country except Great Britain. 

But from the fact, already noted, that the results of the observations on this 



536 HOW CAN I BECOME A GOOD AGENT? 

subject in England and America agree in the main particulars, and from the 
fact that the expectation of life is about the same in Sweden, France, England, 
and America, we are warranted, I think, in concluding that, were the same 
attention given to the comparison of the longevity in the different employ- 
ments in these countries, we should find that the same general principles 
hold good in all. 

HOW CAN I BECOME A GOOD AGENT? 

With an agent, the first necessary step is to gain the confidence of those 
with whom he is dealing. Life Insurance, like every other new thing, no 
matter how great a blessing it is intrinsically, is looked upon with suspicion. 
As those who invest in it must deprive themselves of something else their 
money would buy, they want reliable assurance of the security of their sav- 
ings. To give this assurance and to remove the many prevalent erroneous 
impressions concerning life insurance entertained by the public, is the first 
and most essential task for the agent to perform. A happy success will cer- 
tainly follow confidence, the only fruitful ground- work of a life insurance 
agent's operation. To impart this confidence in behalf of the company he re- 
presents, he must possess it himself, and be able to convince the public that 
he could be induced to represent no cause not thoroughly good and trustworthy. 

With a life insurance agent, the next essential to success is a complete 
knowledge of his business. He must thoroughly understand the general 
principles of life insurance, and the peculiar features of his own company. 
This proficiency he can only acquire by careful study, reading, and experience. 
It will, however, enable him to determine at once the plan, amount, etc., of a 
policy, which age, occupation, social and business relations render most eli- 
gible to any person with whom he comes in contact. Of course his capacity 
to learn and accomplish this much is based upon the supposition that the new 
agent is endowed with common sense, and that he is at least an ordinary 
judge of human nature. 

Another indispensable qualification for a good agent is activity in personal 
solicitation. Publicity obtained through the press and other general chan- 
nels is absolutely requisite to a company's extended success ; but an agent 
who relies entirely upon a flaming sign and long advertisements to attract 
and secure insurants, will have ample time, while waiting for them in his of- 
fice, to meditate upon the prospect of his death by starvation. Expensive dis- 
plays excite suspicion. Many draw their purse-strings tighter at the sight of 
costly allurements. The most judicious are apt to regard those companies as 
the most solid and reliable that make the least public pretension, for the sim- 
ple reason that they conceive that these have the least necessity to " puff" them- 
selves But by insisting so emphatically on personal solicitation, we do not 
mean thai an agent should " bore " any body ; for no respectable man would 
make himself a nuisance, and no honorable company would countenance such 
an infliction on the public. Between boring and sluggishly inactive waiting 
for something to turn up, lie many feasible and becoming methods of in- 
creasing insurance business. 

Another necessary qualification for a life insurance agent is cordial enthu- 
siasm in the cause in which he is engaged. He must think it, speak it, feel 
it, act it. If an agent is sincerely convinced that life insurance is one of the 
most beneficent institutions in existence, it will become his favorite theme of 
conversation. He will always find occasion to introduce it. For this purpose 
he has only to let others know that he is an agent, and that he is at all times 
happy to elucidate the subject of life insurance to their satisfaction. In a 
loss that has just been settled he will find an appropriate topic, and his listen- 
ers will not fail to inquire how much premium was paid, and how much the 
widow received. Many an auditor will thus be induced to insure. If the ad- 
vantages of life insurance attract and interest hearers, so will the sad results 
of neglected premium payment, of the postponement of an intended applica- 
tion, of a rejection consequent upon procrastination, and other shady aspects 



IMPORTANCE OF PUBLIC RECORDS. 537 

of the subject. They will impel many who hearken to act in time and pre- 
clude, in their own case, the occurrence of a similar catastrophe. 

The life insurance agent has many objections to meet ; let him be always 
ready with his answer, and remember that no irrefutable argument can be 
urged against life insurance. Let him exert himself to the utmost to get his 
first insurer. Success with one will immediately give him a valuable ally 
and assistant ; for the proselyte of insurance is always eager to induce all 
with whom his persuasions and example have influence, to do as he has done. 

The other qualities essential to an agent are honesty and fidelity in his 
dealings with his company and its patrons, and manly fairness in his compe- 
tition with the representatives of rival companies. 

EXCESS OF MALE POPULATION. 

The excess of male population in the United States, compared with that 
of the other sex, presents a marked difference with respect to other countries. 
While in the United States and Territories there is an excess of about 730,000 
males in more than 31,000,000 of people, the females of the United Kingdom 
of Great Britain and Ireland outnumber the males some 877,000 in a popula- 
tion of little more than 29,000,000. This disparity is the result of many 
causes. The emigration from the mother country of men in the prime of life, 
and the large demands of their military, naval, and marine service, seem to 
account for some proportion of the excess of females ; while immigration from 
all parts of Europe, our small military and naval service, and the few losses 
we have sustained from the contingencies incident to a state of war, have 
served to exhibit a larger male population, in proportion, than can be shown 
in any country on the globe. 

The great excess of males in newly-settled territories illustrates the in- 
fluence of emigration in effecting a disparity in the sexes. The males of Cali- 
fornia outnumber the females near 67,000, or about one fifth of the popula- 
tion. In Illinois, the excess of males amounts to about 92,000, or one-twelfth 
of the entire population. In Massachusetts, the females outnumber the males 
some 37,600. Michigan shows near 40,000 excess of males ; Texas, 36,000 ; 
Wisconsin, 43,000. In Colorado, the males are as twenty to one female. In 
Utah, the numbers are nearly equal ; and while in New- York there is a small 
preponderance of females, the males are more numerous in Pennsylvania. 

WHO RESORT TO LIFE ASSURANCE. 

It is strange that the major part of Life Insurance is purchased by men 
of wealth instead of by men in humble circumstances. The most ardent sup- 
porters of the institution are the shrewd, practical, and moneyed men who, 
many would say, do not need it. 

If men would reason and say, " I cannot afford to be without Life Insu- 
rance," rather than say, " I cannot afford to pay the premiums," they would 
do better justice to their families, and act like rational beings. 

IMPORTANCE OF PUBLIC RECORDS. 

Only in eight States, namely, Massachusetts, Connecticut, Rhode Island, 
New-Jersey, Pennsylvania, Vermont, South-Carolina, and Kentucky, are State 
registrations of births, marriages, and deaths attempted at all ; and even in 
these, with the exception of Massachusetts, that attention which the impor- 
tance of the subject demands is not awarded to it. In connection with the 
subject of Life Insurance especially, it becomes a matter of prime importance 
to know the average rate of mortality, as well as the relative mortality of one 
section of the country compared with another, and with the whole popula- 
tion. 



538 



NECESSITY OP ACCUMULATION. 



STANDARD MORTALITY TABLE OF NEW-YORK. 



ASSURED LIVES. 



The following is the American Table of Mortality adopted by the State of New- 
York, as the standard for valuation of policies. 



Com 


Number 


Deaths 


Com- 


Number 




Com- 


Number 


Deaths 


pleted 


surviving at 


in each 


pleted 


surviving at 


Deaths 


pleted 


surviving at 


in each 


Age. 


each Age. 


Tear. 


Age. 


each age. 


in ea.cn Year. 


Age 


each Age. 


Year. 


10 


100,000 


749 


40 


78,106 


765 


70 


38,569 


2,391 


11 


99,251 


746 


41 


77,341 


774 


71 


36,178 


2,448 


12 


98,505 


743 


42 


76,567 


785 


72 


33,730 


2,487 


13 


97,762 


740 


43 


75,782 


797 


73 


31,243 


2,505 


14 


97,022 


737 


44 


74,985 


812 


74 


28,738 


2,501 


15 


96,285 


735 


45 


74,173 


828 


75 


26,237 


2,476 


16 


95,550 


732 


46 


73,345 


848 


76 


23,761 


2,431 


17 


94,818 


729 


47 


72,497 


870 


77 


21,330 


2,369 


18 


94,089 


727 


48 


71,627 


896 


78 


18,961 


2,291 


19 


93,362 


725 


49 


70,731 


927 


79 


16,670 


2,196 


20 


92,637 


723 


50 


69,804 


962 


80 


14,474 


2,091 


21 


91,914 


722 


51 


68,842 


1,001 


81 


12,383 


1,964 


22 


91,192 


721 


52 


67,841 


1,044 


82 


10,419 


1,816 


23 


90,471 


720 


53 


66,797 


1,091 


83 


8,603 


1,648 


24 


89,751 


719 


54 


65,706 


1,143 


84 


6,955 


1,470 


25 


89,032 


718 


55 


64,563 


1,199 


85 


5,485 


1,292 


26 


88,314 


718 


56 


63,364 


1,260 


86 


4,193 


1,114 


27 


87,596 


718 


57 


62,104 


1,325 


87 


3,079 


933 


28 


86,878 


718 


58 


60,779 


1,394 


88 


2,146 


744 


29 


86,160 


719 


59 


59,385 


1,468 


89 


1,402 


555 


30 


85,441 


720 


60 


57,917 


1,546 


90 


847 


385 


31 


84,721 


721 


61 


56,371 


1,628 


91 


462 


246 


32 


84,000 


723 


62 


54,743 


1,713 


92 


216 


137 


33 


83,277 


726 


63 


53,030 


1,800 


93 


79 


58 


34 


82,551 


729 


64 


51,230 


1,889 


94 


21 


18 


35 


81,822 


732 


65 


49,341 


1,980 


95 


3 


3 


36 


81,090 


737 


66 


47,361 


2,070 








37 


80,353 


742 


67 


45,291 


2,158 








38 


79,611 


749 


68 


43,133 


2,243 








39 


78,862 


756 


69 


40,890 


2,321 









NECESSITY OP ACCUMULATION. 

The necessity of accumulation in Life Insurance is apparent to the most 
casual reflection. Even if the annual payments continue to the end of life, 
it is obvious that so long as they are distributed in equal sums over all the 
years of his life, while the risk increases with the age, there must be a 
deficiency in the premiums of the later years, which can be made up only 
by reserving the excess of the earlier premiums. 

But the necessity for accumulation becomes more strikingly apparent in 
view of the general adoption of the ten year and other like plans, by which 
the payments, instead of continuing through the whole term of the policy, 
are all brought within its first years ; or by which, in other words, the policy 
is paid for much more largely in advance. To take an extreme case : sup* 



SAVINGS-BANKS AND LIFE ASSURANCE. 539 

pose all the policies of a given company are on the ten year plan, 10,000 
persons at the age of thirty having taken out whole life policies for $1,000 
each. The policies, amounting to $10,000,000, will all have been paid for 
when the insured attain the age of forty, and the income of the company 
from premiums will then cease. In the mean time, if the mortality of the 
insured is that of the actuaries' table, 885 only will have died, and the calls 
upon the funds of the company for the payment of the losses will have 
amounted to $885,000. There remains no provision for the $9,115,000 of 
losses yet to accrue, unless enough has been reserved out of the premiums 
already paid, and is in process of accumulation, to meet them as they fall 
due. If the premiums had been distributed over the whole life instead of 
limited to ten, there would still have been need for accumulation ; but it 
would not have been nearly so great. The point to be observed is the 
necessity for a larger reserve and more rapid accumulation, which the limi- 
tation of premiums imposes on the companies. 



LIFE INSURANCE CONTRASTED WITH FIRE INSURANCE AND 
SAVINGS-BANKS. 

There is an important difference between Life Insurance and Fire Insurance, 
which is often overlooked. Also between Life Insurance and Savings-Banks. 

1. Fire Insurance affords protection, but no investment. 

2. Savings-Banks afford investment privileges, but no protection in case of 
death. 

3. Life Insurance affords both these advantages. It furnishes protection, 
quite as desirable as Fire Insurance, and also investment equal to, if not 
greater than a Savings-Bank. If you die early, you not only secure the 
principal and interest, as in Savings-Banks, but a hundred-fold more. If you 
live to old age, you secure at death more than you have ever invested, while 
in Fire Insurance you secure nothing. 



SAVINGS-BANKS AND LIFE INSURANCE. 

The Insurance Agent, of London, shows the advantages which a policy 
of Life Insurance possesses over a fund in a Savings-Bank, in the following : 

One of the advantages of a Savings-Bank is, that the deposit can be readily 
withdrawn. If the deposit is made for others, and to meet the contingencies 
of a probably distant event, this is really a great disadvantage. While a Life 
Assurance is protected from premature drawings, a deposit in a Savings- 
Bank is liable to melt away, in consequence of this facility of withdrawal. 
Thus it happens that a deposit in a Savings-Bank, intended to form a fund 
for survivors, is exposed to two evils. It is not increased regularly, because 
it is purely arbitrary with the depositor whether he adds to his deposit or 
not ; and further, the deposit may at any time be wholly withdrawn, or 
may be dissipated, as it too often is, by small " nibbles," under which the 
amount gathered together soon disappears. 

Now these two objections to a Savings-Bank, for such a purpose, are not 
found in Life^ Assurance. The payment must be regular, and the amount 
cannot be withdrawn at will. In the event of disastrous circumstances 
rendering future payments of premium impossible, there are two courses 
open to the assurer. He can sell the policy to the office, or he can exchange 
it for a paid-up policy, one on which no further payment will be required. 

But in addition to the above, it may be added that $1,000, deposited with a 
Mutual Life Insurance Company at the age of twenty-five, would secure to 
the family of the assured, if he should die at the age of thirty, the sum of 
$3,425 ; while, if the $1,000 be deposited with a sound Savings-Bank, the 
interest will only have accumulated in five years so as to make the gross 
amount $1,280.— Bank and Insurance Guide, January, 1868. 



540 GERMAN LIFE INSURANCE LITERATURE. 



LIFE ASSURANCE AS RELATED TO THE FAMILY. 

No view of the system of Life Insurance is broad enough which does not 
regard it as one of the most beneficent, not only in its relations to the 
individual and the family, but also to society and the state. Families are 
the foundation of a well-ordered society, and the welfare of the state. If 
the system is not in itself one of the noblest of public charities, it is some- 
thing better, because it places its beneficiaries above the need of public 
charity. It deserves the fostering care of wise and liberal legislation. It 
should be freed from all unnecessary burdens. Government should as soon 
tax its asylums and hospitals, as seek to gain a revenue from the deposits 
which foresight and affection have set apart for the protection of thousands 
among the most helpless of its own citizens. A tax on Life Insurance is 
nothing more nor less than a tax on widows and orphans. — Massachusetts 
Report, 1867. 

LIFE INSURANCE BUSINESS IN RUSSIA. 

A succinct history of insurance in Russia recently appeared in the 
Insurance Gazette, from which we learn that the first insurance company 
was established in St. Petersburg, under the title of " Russian Company for 
Insuring Capital and Interest," on the 25th of October, 1885, and held an 
exclusive privilege till 1856, which was not renewed, but the appointment 
of agents by any insurance companies is prohibited till 1868. Consequently, 
this field will probably be soon open to foreign companies. As the privileged 
company, during the term of its existence, only issued 5,228 life policies, 
with a capital of 17,562,000 rubles, of which, after deducting deaths and can- 
celled policies, there remained in 1865 only 2,295 persons, and these mostly 
German settlers, with a capital of 7,686,000 rubles, this field may be said to 
have lain entirely fallow up to this time. Since 1856 foreign companies have 
done only a trifling business in Russia, by means of secret agents ; for the 
Greek Church is as antagonistic to Life Insurance as is the Roman Catholic. 
At present, " where one Russian insures there are fifty Germans ; but it was 
only in 1829 that the first German Life Insurance Society was founded, and 
at that time there was fully as strong a prejudice against insuring among the 
Germans as now among the Russians. It is true Qf the sixty millions of 
people comprising the population of Russian territories, a great part consists of 
people who will probably remain in a semi-barbarous state for some cen- 
turies to come, and that it is to the cities, which are, however, rapidly 
increasing in wealth and population, that insurance societies must look for 
customers." 

The organ of English Insurance Companies appears to view this as a 
lucrative field, and intimates that those who take time by the forelock will 
have the benefit. 

GERMAN LIFE INSURANCE LITERATURE. 

Several valuable works in German have lately appeared, upon the various 
points of Life Assurance. Among them are the following : 

1. Instructive Essays on Life Insurance, by Dr. Wiegand, of the " Iduna,' 
treating of the duties of agents, and containing valuable hints as to how to 
obtain insurance, and the theory of insurance. Halle, 1867. 

2. How to apply Life Insurance to the Wants of the Masses, and by its means 
to organize schools, advance industry, and benefit communities, by Dr. Peche, 
a School Director. Prague, 1867. 

3. The Practice of Life Insurance, as applied to its practical workings, 
objects, and systematic agency business, by Dr. Wiegand, of the "Iduna." 
Halle, 1864, 3d edition. 

4. Miscellaneous Essays on Life Insurance, for Agents, by same author. 
Halle, 1865. 

5. Also, a very valuable work for actuaries, by Dr. G. F. Knapp, Director 
of the Statistical Bureau at Leipsic on the Ascertaining the Mortality from 



VOICE OF THE PRESS. 541 

the Census Statistics. Leipsic, 1868. Just issued and ante-dated. The work 
is dedicated to the Statistical Congress at Florence — contains 120 octavo 
pages and four lithographic actuarial tables. The object of the work is, to 
give directions how to ascertain the mortality according to the age, that is, to 
fix the order of sequence of mortality from the statistics of population. 
While it admits that there is an abundance of practical statistics relative to 
the comparative numbers of living and dead in nearly every country, 
there is a want of theoretical statistics, to show how these numbers affect or 
are connected with the order of mortality. He proposes to supply this 
want by analysis. 

THE AMERICAN PHYSIQUE. 

A surgeon in New-York examined 8,700 recruits for the army, of whom 
4,538 were Americans, 1,694 Irish, 1,453 Germans, 315 English and Scotch, 
135 French, and 545 belonging to twenty-six other nations. He made a 
strict examination, to determine whether there was any foundation for the 
frequent affirmation of the English journals, that the physical man in 
America was deteriorating. The Americans in New- York City were, of 
course, not above the average of American physique, yet his examination 
puts them ahead. In stature the American born ranks the highest, the 
English next, the Irish next, the Germans next, and the French last. In 
regard to their physical conformation, he divided the recruits into four classes, 
and found the American to possess the highest rate of prime physique. Of 
American-born recruits 47.5 per cent, had a prime physique, the Germans 
40.75 per cent., and the Irish 35 per cent. He arrived at the conclusion 
that no race can show a larger proj>ortion of osseous and muscular 
development ; and he ascribes it not to race, but to the diffused blessings of 
meat and drink. 

VOICE OF THE PRESS. 

Few, perhaps, know how extensively the idea has grown in this country. 
Here is the twelfth annual report of the Massachusetts Insurance Com- 
missioner, and some of the figures will be interesting. We take the period 
embraced between 1858 and 1866 — eight short years. In 1858, there were 
fourteen companies ; in 1866, forty-three. There were 42,502 policies, repre- 
senting an amount of $116,482,196, in 1858. In 1868, we see 310,738 policies, 
representing $871,863,925. We have a business that has increased over 
700 per cent. Well it may be said, how is it possible for any private com- 
panies to carry obligations of such enormous magnitude ? Let us look at 
that a moment, for it is a most essential consideration. We know that life 
insurance has been reduced to a science of exquisite subtlety ; that our 
chances of living and dying have been put to the wisest mathematical tests ; 
that gifted men have thought it into a system. What do we see ? First, 
the income. In 1858, these companies received $4,835,886. In 1866, the sum 
in all amounted to $41,877,104. The total assets have increased from 
$17,446,455 to $88,666,232, while the computed premium reserve, which was 
nearly $11,000,000, is now over $6-5,000,000. The claims by death have been 
a small per cent, of this. In 1859, these amounted to $1,197,583, while in 
1866 they were $5,353,141 ; so that the fund in reserve to meet these 
demands has never been less than ten times as large as any demand that 
could arise from ordinary mortality. Let it be remembered that this period 
embraces the war years ; and that many a gallant fellow, before he put on 
his knapsack, placed an insurance on his life. The comfort of that wise 
deed to-day remains with his family ! 

Thus briefly, with just an appetizing sprinkling of figures, have we indi- 
cated the immediate and absolute advantages of life insurance. We have a 
good deal to say on the subject. We feel that there is no duty more imme- 
diate, and absolute, and unavoidable, than this, and we hope to bring it 
home to the conscience of every reader. — Neuh-York Tribune, 1867. 



542 VALUATION OF POLICIES. 



MARRIAGE FAVORABLE TO LONG LIFE. 

James Stark, M.D., a corresponding member of the American Statistical 
Society, residing at Edinburgh, Scotland, has furnished a paper upon the 
" Influence of Marriage on Life and Mortality." His calculations are very 
curious. If we take 100,000 married, and the same number of unmarried 
gentlemen, 1,174 of the latter class die every year between the ages of 20 
and 25, to only 597 of the former. This difference diminishes as life goes 
on, but continues to advanced old age. Between 75 and 80, 1,454 single men 
die each year out of every 100,000 of their unhappy class. The proportion 
of married men is 1,168 out of every 100,000. So that marriage adds to a 
man's chances for longevity nearly 100 per cent, after he has reached 20, 
and about 50 per cent, when he has passed 30 years. As Dr. Stark is prin- 
cipal director of the General Registry office of Scotland, his figures are 
authoritative. 

VALUATION OF POLICIES. 

To Massachusetts belongs the honor of having first established a system 
of public supervision of Life Insurance which includes an official valuation 
of policies. The necessity of the valuation to an effective supervision, arises 
from the peculiar nature of the business of Life Insurance. In this pecu- 
liarity lies its greatest danger — the opportunity for fraud or fatal error. Life 
Insurance reverses the laws which govern all other commercial enterprises 
and investments. In the latter the expenditure comes first, and the profits, 
if any, come afterwards. In the first years of a Life Insurance company, 
its treasury overflows with the incoming premiums, while its liabilities are 
postponed for the lifetime of a generation. For more than thirty years it 
furnishes a constant margin for plunder or perversion of its funds, while its 
ultimate failure, though certain if the opportunity is improved, is still remote. 
Unless its condition is probed by some decisive test, it exhibits no necessary 
symptoms of its insolvency until the claims by death begin to equal or 
exceed the premium receipts ; and this period will not ordinarily be reached 
until nearly forty years from its start. 

The precise mode in which a valuation of the policies of a company 
decides the question whether the company has been true to the assumptions 
on which its business proceeds, and which, if obeyed, make a Life Insurance 
company one of the most stable and secure of all human institutions — in 
other words, how the valuation determines the solvency or soundness of a 
company, or the reverse — is often not very clearly apprehended. The ordi- 
nary import of the term valuation is that of estimating the value or worth 
of a contract or thing ; and its technical meaning, as applied to policies of 
Life Insurance, is substantially the same. A policy may be valued for two 
purposes, by different processes, and with different results — either to ascertain 
its value or worth to the company, or, in other words, the pecuniary loss 
which its discontinuance would involve to the company — or to ascertain its 
value or worth to the insured. It is with reference to the latter that the 
term is here used, and the official valuation made. 

The precise thing intended would, however, be more easily understood if, 
as in Fire and Marine Insurance, it was described as the process of com- 
puting the premium reserve, or ascertaining the amount required to reinsure 
all the outstanding risks of a Life Insurance company ; for valuing the 
policies of a Life Insurance company is nothing more nor less than the 
process of arriving at this result. The thing sought to be accomplished, 
and the reasons for it, are the same in Life as in Fire Insurance. A Fire 
Insurance company, to be sound, must have, over and above all its other 
liabilities, funds equal to the amount of all the unearned premiums, or, what 
is the same thing, funds sufficient to reinsure with another sound company 
all its outstanding risks. Nothing more or less than this is required of a 
Life Insurance company. The liability of a Fire Insurance company on a 
given policy is for that part of the premium paid by the insured which the 
company has not earned by carrying the risk ; and this unearned premium 
is also the value of the policy to the insured. So the liability of a company 



VALUATION OF POLICIES. 543 

on a policy of Life Insurance, and in like manner the value of the policy to 
the insured, is precisely the amount of the unearned premium, or the excess 
with interest of the premiums actually paid over what the company has 
earned by carrying the risk. 

In Fire Insurance, where the policies are of uniform duration, and the 
risks are commencing and expiring at regular intervals, the liability for 
reinsurance is ascertained, or in the phraseology of Life Insurance, an 
approximate valuation of the policies is made, by taking 50 per cent, of the 
premiums received on outstanding risks, it being assumed that the policies 
have, on the average, half run out. But in Life Insurance, where the condi- 
tions of the policies vary almost endlessly with the age of the insured, the 
term of insurance, and with other features of the contract, this shorthand 
method is not applicable ; though results which approximate very nearly to 
exact accuracy may be obtained by several methods which depend on the 
same law of average. The rationale of an exact valuation is, however, quite 
within the ordinary comprehension. 

Life Insurance proceeds upon two principal assumptions — the law of mor- 
tality, and the rate of interest on money. Assuming that a given table of 
mortality correctly expresses the rate of decrease of a large number of 
lives, and that a certain rate of interest will be realized in the future on 
invested capital, it is not difficult, though somewhat laborious, to ascertain 
the exact average cost or premium for insuring a life at any given age, 
assuming that there will be no expenditures other than for claims on policies. 
To meet the probable expenses of the business and other contingencies, there 
is added to this net or mathematical premium a' per centage of margin or 
loading, ranging from 10 to 40 per cent., making the gross or actual premium 
charged. But it must be assumed that this margin or loading will be used 
up year by year in expenses or dividends, and no profit from this source can 
be safely anticipated as present assets. Consequently the valuation must be 
based on the net or mathematical premium without the loading. 

By the actuaries' table of mortality, with interest at four per cent., the net 
annual premium for a whole life policy of $1,000, commencing at the age of 
30, is $16.97. The corresponding premium for a policy commencing at the 
age of 40, is $23.68. The difference is $6.71. Supposing, then, a company 
has taken a risk for $1,000 at the age of 30, and carried it ten years, or until 
the insured is aged 40, and then wishes to transfer the risk or reinsure it 
with another company — how much must the first company pay the second 
for assuming the risk ? The latter company, taking the risk as a new one 
at the age of 40, would charge a net annual premium of $23.68 ; but it will 
actually receive from the policy-holder only the net annual premium corre- 
sponding to the age of 30, or $16.97. This annual difference of $6.71, running 
through the remaining years of the policy, must be made up to the company 
taking, by the company transferring, the risk. In other words, the latter 
company must pay the former the present value of a life annuity of $6.71, com- 
mencing at the age of 40.* This is the amount of the premium reserve required, 
or the liability for reinsurance, on this particular policy ; for though the com- 
pany may not desire to reinsure the risk, it must have the ability to do so. It 
also represents the value of the policy to the insured. It is what he has paid 
in excess of the risk carried by the company. It is the amount of his 
unearned premiums. The company must have reserved this amount out of 
the premiums already paid. Ascertaining upon the same general principle the 
unearned premium on all the outstanding policies, or technically speaking, 
the value of all the policies, the whole amount of the required premium 
reserve is found ; and by comparing the required with the actual reserve, or 
net assets of the company, its soundness or unsoundness is revealed ; and in 
no other way can the revelation be made. It answers the vital question in 
Life Insurance, whether the company is accumulating for the future that 
portion of its current premiums which belongs to the future. — Massachusetts 
Report, 1867. 

* The same result maybe obtained by taking from the net single premium for a policy to be 
issued at the age of 40, the present value of the future net annual premiums for the age of 
30, the actual age of issue in the case supposed. 



544 LIFE ASSURANCE GEMS. 



EIGHTY LIFE ASSURANCE GEMS. 

Life Assurance ! Oh ! what music, 

Sweeter than all notes of art, 
In this pregnant age is sweeping 

Through the chambers of the heart. 
How thou hast the widow shielded, 

How the orphan fed and taught ; 
What firm, fearless independence 

To uncounted households brought I 
Well it was the Lightning Tamer, 

He who robbed the cloud of death, 
Saving many a stately structure, 

Eulogized thy saving worth ; 
Well he saw the surest rainbow 

Was by thee o'er life unfurled — 
Thee, grim Poverty's Defier, 

Pitying Angel of the World. 

Now, beloved, I claim that Life Insurance is not only a humane, but I might almost say a 
Christian Institution.— Rt. Rev. Dr. Hawkes, Bishop of Missouri. 

Life Insurance may be employed advantageously for the benefit of families and of indivi- 
duals of all classes of society, as well as for those in moderate circumstances. All may, by 
the exertion of a little forethought and a small outlay, protect their families from want, inde- 
pendently of any charitable aid. — Rt. Rev. Dr. Potter, Bishop of Pa. 

All men think all men mortal but themselves ; 
Themselves, when some alarming shock of fate 
Strikes through their hearts the sudden dread ; 
But their hearts wounded, like the wounded air, 
Soon close ; where, passed the shaft no trace is found. 
As from the wing no scar the sky retains, 
The parted wave no furrow from the keel, 
So dies in human hearts the thought of death. 

A policy of Life Insurance is always an evidence of prudent forethought ; no man with 
a dependent family is free from reproach if not insured.— Lord Lyndhurst. 

To-morrow, didst thou say ? 
Methought I heard Horatio say, To-morrow ! 
Go to ! I will not hear of it. To-morrow ! 
'Tis a sharper who stakes his penury 
Against thy plenty — who takes thy ready cash, 
And pays thee naught but wishes, hopes, and promises, 
The currency of idiots. 

Evert act of self-denial practised by man or woman in behalf of others, tends to the culti- 
vation of good habits in the person making the sacrifice. The payment of premiums for a 
life policy induces a habit of prudent economy, teaches man or woman how many things 
they can safely dispense with, and confers on them an inner sense of duty done, of good work 
accomplished, that lifts their minds into higher planes of thought, and opens up the nobler 
capacities of human nature, beautifying life and sanctifying existence. 

When a house is on fire, and its destruction appears inevitable, is not the question asked 
by every prudent man, Is it fully insured ? When a ship with a valuable cargo is lost at sea, 
is not the same question asked ? And why, upon the death of a father whose family were 
dependent upon him, should not the inquiry be made, Has he provided for them by an insu- 
rance upon his own life ? There is greater necessity for insurance upon life than for fire or 
marine insurance. In these the damages are only incidental, and may never fall upon the 
property, or if they do, the energies of the owner may repair the disaster ; but death, sooner 
or later, is an issue from which there is no escape, and the energies of the man sleep with 
him in the grave. 

Alas ! that so many men, and in things of the greatest moment, should verify the affirma- 
tion that 

" At thirty a man suspects himself a fool ; 
Knows it at forty and reforms his plan ; 
At fifty chides his infamous delay, 
Pushes his prudent purpose to resolve, 
In all the magnanimity of thought, 
Eesolves and re-resolves— then dies the same / 
And why ? because he thinks himself immortal ; 
All men think all men mortal but themselves." 



LIFE ASSURANCE GEMS. 545 

A long chapter might be written upon that one melancholy phrase— better days ; a cap- 
ital essay it would form on the excellence of life assurance. It makes one's heart ache to see 
how people who have "seen better days " are treated by those who for the moment little 
think how soon the same may be their own lot. Are you assured, gentle reader? If you are 
not, let the sight of "reduced means" teach its lesson, and think how soon, in the provi- 
dence of God, your own wife and little ones may suffer the same sorrow. Do your best to 
prevent so miserable a contingency in your family, and let "life" and "assurance," the ex- 
tremes of certainty and uncertainty, meet together. 

No young man has a right to die, without leaving an influence tha^, will repay the debt of 
gratitude growing out of parental, maternal love. He has been borne forward from infancy 
to manhood. How can the obligations flowing therefrom be discharged, but through the 
medium of an influence that will bless his own family circle, or those who may succeed him ? 
Our hopes rest upon the young men of our country ; they are invited to an embrace of this 
subject, as a passport to favor, as a medium of great good in the present and future. 

The whole family feels its sweet influence. The daughter will not have to be kept from 
school^ and sew for a living ! The son can get an education, or be set up in business ! And 
the dear group of little ones are more blithesome, because papa has had recourse to the phi- 
losopher's stone that creates a capital in an instant ! The wife rejoices in the calm reflec- 
tion that God has opened to her and the children an effectual door of relief in case their 
natural protector and support is snatched away. And the husband feels that a load is off his 
mind. He is a new man. He has done his duty, and has a right to trust God and be at peace. 
— Life Assurance Illustrated. 

It is too late to begin to arm when the enemy is in our quarters. But he that forecasts is 
not surprised. 

Ninety-five failures in a nundred, amongst most business men, in the city, tell a sad tale 
of the perplexity and sorrow, the corroding cares and anguish of mercantile life. 

This duty, (Life Assurance,) in relieving the mind from care for others to whom we owe 
the forethought of affection, often relieves the body of many a gnawing pain, and sometimes, 
to the surprise of the most experienced physician, prolongs life itself.— Bulwer. 

The relief from anxiety afforded by Life Assurance very frequently contributes to prolong 
the life of the assured, while it materially augments the comfort and well-being of those de- 
pendent upon him. — McCulloch, Commercial Dictionary. 

What an advantage if we lived easier, and realized more of that quiet, social enjoyment 
so beautifully described in Cowper's Winter Fireside : 

" Now stir the fire and close the shutters fast, 
Let fall the curtains, wheel the sofa round ; 
Thus let us welcome peaceful evening in ; 
And gathering, at short notice, in one group 
The family dispersed, thus pass the hours 
In social converse and instructive ease." 

» 
Now, who can properly estimate the benefits of Life Assurance in neutralizing this dread- 
ful evil that so corrodes our sweetest comforts ? In this light it is unspeakably valuable. — 
Life Assurance Illustrated. 

The assurance of life is one of the most Christian things that I know ; for what is it ? It 
is taking the load that would crush one family, and spreading it over twenty thousand fami- 
lies ; so that a mere drop lights upon each, instead of the overwhelming torrent falling upon 
one.— Eev. Dr. Cumming. 

The looker-on was a round, red-faced, sturdy yeoman, with a double chin and a voice 
husky with good living, good sleeping, good humor, and good health. He was past the 
prime of life ; but Father Time is not always a hard parent, and, though he tarries for none 
of his children, often lays his hand lightly upon those who have used him well, making them 
old men and women inexorably enough, but leaving their hearts and spirits young and in full 
vigor. With such people the gray head is but the impression of the old fellow's hand in 
giving them his blessing, and every wrinkle but a notch in the quiet calendar of a well-spent 
life.— Dickens. 

No selfish or unworthy motive can enter into it. On the contrary, the act itself betokens 
a delicate and cultivated moral sense in its author ; sftid while thus an evidence of rectitude 
and benevolence, on the part of him who wills and executes it, its effects upon those who 
are the recipients of its benefits, are, in both a social and moral view, most highly satisfac- 
tory and blessed. In any view of the case, then, Life Insurance, for such a purpose, appeals 
to our best and noblest feelings and principles. It furnishes an opportunity for the dis- 
charge of a most sacred social and domestic obligation, supplying a want in human society 
for which no other provision is found or made. 

What a mighty procession is marching toward the grave during each year ! At the usual 
estimate, during a year, more than 33,000,000 of the world's population go down to earth 
again. Place them in long array, and they will give a moving column of more than thirteen 
hundred to every mile of the globe's circumference 1 Only think of it ; ponder and look 
upon these astounding computations ! What a spectacle, as they " move on," tramp, tramp, 
tramp — forward 1 upon this stupendous dead march ! 



546 LIFE ASSUKANCE GEMS. 

Life is short and time is fleeting, 

And our hearts, though strong and brave, 
Still, like muffled drums, are beating 

Funeral marches to the grave. 

No merchant would risk his whole capital on a single adventure, no ship-owner on a single 
ship ; both would ignore the reckless risk that might involve them in absolute ruin, and 
provide against such a contingency by dividing the risks, and by Assurance against loss by 
sea or fire, or other casualty. Yet, practically, the individual who does not assure his life, 
in proportion to the value of that life to those dependent upon it, incurs the reckless risk on 
the single venture, when the means are within his power to equalize it. 

"In case of my death this will ' keep the wolf from the door ' of those whom I love. God 
bless the man who invented ' life assurances ! ' I shall soundly sleep to-night, and earnestly 
repeat my wife's prayer : 

' The day is ended. Ere I sink to sleep, 

My weary spirit seeks repose in Thine. 
Father, forgive my trespasses, and keep 
This little life of mine. 

' With loving kindness curtain thou my bed, 

And cool, in rest, my burning pilgrim feet ; 
Thy pardon be the pillow for my head : 

So shall my sleep be sweet. 

' At peace with all the world, dear Lord, and thee, 
No fears my souVs unwavering faith can shake ; 

AlPs well ! whichever side the grave for me 
The morning light may break." 1 " 

A Soldier Going upon Duty. 

Wherein lies the difference between neglecting to provide for your household while liv- 
ing, and leaving them to certain starvation, as far as you are concerned, at your death ? Yet 
how many a man lies down on his bed, and dies, leaving his wife and children not only pen- 
niless, but absolutely entailing upon them the charge of his burial ? Nothing can be more 
horrible to his survivors— nothing more dishonorable and ignominious to himself. Better 
would it be to train up your family in penury and want— better to inure them to the bitter- 
ness of poverty — better to treat them with uniform contumely, and thus prepare them for 
the insults and neglect and scorn of the world, than to surround them with all the appliances 
of wealth, to make luxury a necessity, to hang their happiness on the slender thread of your 
own existence, and, when it breaks, to cast them upon the world little better than beggars. 

When the cold shiver runs through the frame— when the quickened pulse, the fevered 
tongue, the patchy complexion, the short cough, and the hectic flush appear — it is too late 
to rush to the assurance office and offer yourself for a Life Policy. Imagine the situation of 
a man who, suffering under slow decline, feels his energies daily failing, and his resources, 
at the same time, day by day decreasing. With the prospect of a speedy dissolution, he 
knows that all whp are dependent upon him— the victims of his neglect— must go forth to 
seek their bread amid the closed hands and stony hearts of the world. He will picture to 
himself that which will follow on his decease — which he has seen happen to others, and 
from which he can anticipate no immunity; the break-up of his home, his "household 
gods " roughly handled by strangers, his conduct harshly condemned by his friends, the 
love of his children failing before the rude shocks of poverty, and their respect, by continual 
and bitter suffering, dwindling down to censures on his memory. It is an awful thing for a 
man on his death-bed to consider that, ere his corpse grows cold, his widow may be hag- 
gling with the undertaker for the price of his coffin, and his family may hunger and thirst to 
provide him a decent sepulture. — English publication. 

People sometimes object that they cannot " afford'''' to assure. Such an argument 
should rather teach a man the imperative necessity for assuring at once. If he feel so much 
difficulty in withdrawing such a trifle of his income, let him reflect on the frightful condition 
into which his death would plunge his family. 

Osborne says, "What you leave at your death, let it be without controversy, else the 
lawyers will be your heirs." "But how am I to keep my money out of these lawyers' 
hands ?" asked Johnson. Why, the thing is as simple as simple can be. Invest your money 
in a life assurance policy, payable to your wife, children, or other relatives. Immediately 
on your death, the beneficiary applies for the money at the office of the company, and gets 
it. If, on the other hand, you leave your money by a will, there will be a struggle between 
the heirs ; lawyers will be employed ; they will take all the money for their costs, and send 
in a little bill besides ; and your friends will be worse off than ever. Even if harmony 
should prevail, it would take a long time to have your will proved, an executor appointed, 
and all the innumerable forms of the law complied with ; and your poor wife might starve, 
while she was waiting to receive what might be due her. Promptness in payment is one 
of the jewels in the diadem of life assurance. It is a desirable thing for the widow even of 
the millionaire to be able to draw some thousands immediately on her husband's demise, 
without being embarrassed by the "law's delays. 1 ' Take time by the foYelock, and be 
insured ! 

The very saddest cases of utter destitution are those of women suddenly left by their 
husband's death without a penny in the world, and absolutely dependent on their lonely and 
exhausting toil. The husband, perhaps, has been laid up for two or three months before 



LIFE ASSURANCE GEMS. 547 

hand : a little store of savings has been exhausted, owing to the loss of the husband's work 
and the expenses of his illness ; thay have fallen back with the rent, and when the last duty 
of watching is done, and all is over, the poor widow has to turn and face a prospect of abso- 
lute destitution. It is impossible to avoid reflecting, when one witnesses such a case, what 
an inestimable boon it would be to such a widow if her husband had been able to insure her 
a moderate annuity or sum which would enable her to apprentice her children and give them 
a fair start in life. 

Life Insurance is a glorious thing. There is no doubt of that. Millions of sensible, 
thoughtful human beings are daily finding out that they can lie down more quietly — die, if 
need be, and pass away into the dread and unknown future with cheerfulness, if they know 
that the loved ones left behind on earth are provided for. The benefits of Life Insurance 
are no longer subjects of discussion. All admit them. Delve, plod, and contrive as men 
may, to secure comfort and ease to those who come after them, they find nothing so sure as 
a Life Insurance policy to do it. 

The paltry savings of the week, which you would otherwise throw away upon toolish 
extravagances, if used to pay the premium on a policy of life assurance, would keep your 
family from want and misery, and make them comfortable 

O life ! how pleasant is thy morning, 
Young fancy's rays the hills adorning ! 
Cold, pausing caution's lesson scorning, 

We frisk away, 
Like schoolboys at the expected warning, 

To joy and play. 

Here we have really the people's bank of savings, proving prudence in the past and gua- 
ranteeing security for the future. 

The advantages to be obtained by insurance are thus briefly stated by McCulloch (Com. 
Diet., Art. Insurance) : " The loss of a ship or the conflagration of a cotton-mill is a calamity 
that would press heavily even on the richest individual. But were it distributed among 
several individuals, each would feel it proportionally less ; and provided the number of 
those among whom it was distributed were very considerable, it would hardly occasion any 
sensible inconvenience to any one in particular." Precisely the same argument is applicable 
in the case of Life Insurance. 

He that soberly comes forward and insures his life has, in reality, struck a bargain with 
himself and a compromise with fortune ; he has bid his soul put away all inordinate desires, 
in order to lay fast hold upon what is solid and safe. 

In the discussion of the phenomena which masses present, individual peculiarity disap- 
pears and general laws emerge. The actions which seem to be the result of free-will in the 
individual, assume the guise of necessity in the community. Just as we are sure that a man 
is born, develops, and dies under the operation of laws that are absolutely invariable, so 
communities seem to be under the influence of unchangeable laws. — Professor Draper. 

Life Insurance confers on the world a mixed benefit. It stimulates and encourages 
habits of prudence and self-denial ; presents the ready means for putting them in practice ; 
assists in providing for the widow and orphan— for sickness and old age ; and gives mean- 
while a feeling of confidence, security, and independence. These would be works for the 
philanthropist, if they were not, as happily they are, the labors of the man of business. — 
J. 21. McCandlish. 

A girl of seventeen, in Schoharie county, N. T., was asked, a few days ago, by a smart 
young man who had no means but his salary, to become his spouse. " Is your life insured ?" 
asked she. " No," said the swain. " Then you must have it insured," rejoined she, " for 
I'm not going to marry you and have you die, and leave me to beg for a living." 

It is unquestionably the duty of every man to provide, while he yet lives, for his own. 
We would say that it is not less his duty to provide, as far as he can, against their being left 
penniless in the event of his death. Indeed, between those two duties there is no general dis- 
tinction ; for Life Assurance makes the one as much a matter of current expenditure as the 
other. One part of his income can be devoted to the necessities of the present ; another 
may be stored up by means of Life Assurance, to provide against the future. And thus he 
may be said to do the whole of his duty toward his family, instead of (as is generally the case) 
only one half of it.— Chambers's Edinburgh Journal. 

You ask my opinion as to the principle of Life Assurance. That I expressed years ago, in 
having my own Ufe assured for a small sum : far too small, but then up to my means of pay- 
ing the annuity. And if life was more frequently assured by men of salary, and of small 
capital, there would be fewer dependent widows and orphans than there are.— Late Nicholas 
Murray, D.D. 

Since manhood reached me, I have kept on my life a perpetual insurance : and I think 
my duty to those dependent upon me would be undischarged if it were not so.— Bishop Hawks. 

Let woman speak for woman — let each urge the other's claim, and make selfish man com- 
prehend that he has a conscientious course to pursue, a bounden duty to perform, in pi'ovid- 
ing for those who constitute his " home ;" and that, in resorting to Life Assurance, he is 
risking nothing, but truly securing a certain profit upon that which is at all times an uncertain 
event. 



548 LIFE ASSURANCE GEMS. 

I am satisfied that among one hundred merchants and traders, not more than three ever 
acquire independence. — Address of Gen. Dearborn, Boston. 

One ought to be satisfied if he gets at the end of the twenty years all the money he has in- 
vested, with more than seven per cent, interest, and has had the assurance all through those 
twenty years that, in case he died, the full amount of the policy would at once be payable to 
the beneficiary under the same. It seems too good to be true, but it can be proved if you 
will take the trouble to inquire. 

There is nothing in the commercial world which approaches, even remotely, to the se- 
curity of a well-established and prudently-managed Life Assurance Company.— Professor de 
Morgan. 

The importance of Life Assurance to society everywhere ; its strengthening influence 
upon the sinews of social life: the solidity it imparts to all domestic institutions ; the pro- 
tection it affords to the labors and the recreations of existence ; the comfort it brings to the 
sacred fireside of home ; the relief it pours out so abundantly upon the bereaved and suf- 
fering ; the countless benefits it scatters along the pathway of life ; the blessings it reserves 
for a future of sorrow— all these are now more truly perceived and more warmly appreciated 
than ever they were before. People are beginning to understand, and to understand in 
earnest, that their best interests are conserved in these wise and benevolent institutions. 
Great confidence is reposed in them, in all directions. The hopes of parent and child, lover 
and sweetheart, husband and wife, brother and sister, old and young, the widowed and the 
orphaned— all are garnered up in their keeping.— N. P. WiUis. 

Life Assurance.— The important subject of Life Assurance is gradually and deservedly 
gaining public attention by the force of its own merits. The time is not far distant when 
the deatli of a man leaving his family unprovided for by a policy of Life Assurance, will leave 
the stain of neglected duty upon his character. It is a duty which every man owes to his 
own dependents and to the community. He who neglects it is not a good husband, father 
or citizen. He has no right even to risk the chance of throwing the future support of his 
family, in case of his death, on the community at large, or on relatives and friends, when 
it is in his power so easily and surely to provide against such contingencies.— New York 
Express. 

I regard the institution of Life Assurance Companies, particularly on the mutual prin- 
ciple, as among the highest and most beneficent of our Christian charities. They are bene- 
volent in their inception and administration ; they are every way beneficent in their results. 
— Bev. Dr. Farley. 

A good man leaveth an inheritance.— Proverbs 13 : 22. 

Life Assurance contributes effectually to make life itself longer, society happier, the ag- 
gregate prosperity of the community greater ; and just so far as it shall extend, while still 
conducted on sound principles, it will multiply the kindly bonds that connect men, while 
encouraging economy, invigorating enterprise, justifying hope in each individual, and shed- 
ding the light of a more serene happiness into many households. — Bev. B. S. Storrs, D.D. 

Evert reason which makes it a man's duty to provide for his family while he is living, 
acts with yet greater force to secure for them a comfortable subsistence after he shall have 
been removed from them. 

An. antidote against poverty is to be found in Life Assurance. The preventive is at once 
simple, cheap, and sure. While always simple and always sure, its cheapness is affected 
only by delays, which year by year increase the uncertainty of life, and compel a proportion- 
ate advance in the rate of premium to be paid. Proverbially dangerous as delay is accounted 
in other matters, in this it is preeminently hazardous. Wherever life assurance is a duty at 
all, it is a present duty, and procrastination becomes a sin.— New-York Methodist. 

An assurance upon any life, effected in any office, is not only a private, but a public bles- 
sing.— Dr. Morgan. 

Of man's miraculous mistakes, this bears 
The palm, " That all men are about to live." 

In the middle ranks of life few have much capital to leave for the benefit of their families 
in the event of their early decease ; but most have incomes. By devoting a portion of the 
latter in the way of Life Assurance, the head of a family can make sure that, die when he 
may, even on the day after the first annual payment, his widow and children will be endowed 
with a certain amount of money.— Professor de Morgan. 

Be wise to-day; 'tis madness to defer: 
Next day the fatal precedent will plead ; 
Thus on, till wisdom is pushed out of life. 
Procrastination is the thief of time. 

Facts prove that the man who insures his life is more likely to live to an advanced age 
than he who neglects to do so. 

In the story, Heart of Mid-Lothian, by Sir Walter Scott, Effie Deans is con- 
demned to death, and her sister, finding all other means to save her life useless, walks from 
Edinburgh to London, personally to intercede with the queen, whom she sees after many 
difficulties. The queen is surprised at the immense labor which has been undertaken 
by the girl, and inquires why she should be expected to grant the pardon, when Jeanie elo- 
quently replies: "Omyleddie! when the hour o' trouble comes that comes to mind and 



LIFE ASSURANCE GEMS. 549 

body, and the hour o' death comes that comes to high and low, it is no' what we ha' done 
for ourselves, but what we ha' done for others, that we think on maist pleasantly." 

Life Assurance may be employed advantageously for the benefit of families and individuals 
of all classes of society, as well for those in affluence as for those in moderate circumstances. 
All may, by the exertion of a little forethought and a small outlay, protect their families from 
want.— lit. Rev. Bislwp Potter, of Pennsylvania. 

To-morrow, and to morrow, and to-morrow, 
Creeps in this petty pace from day to day, 
To the last syllable of recorded time ; 
And all our yesterdays have lighted fools 
The way to dusty death. 

In my opinion, and judging from my own experience, annuities secured for a family are of 
important service to relieve the mind of the father of a helpless family from corroding 
anxiety on their account. It has been for many years a comfort to me that my family will 
have the benefit of annuities at my decease ; and though, on account of my protracted life, 
the fund will be a great gainer by me, yet I do not regret that, as the gain belongs to a be- 
nevolent institution. — Rev. Archibald Alexander, D.D. 

I trust the day is not far distant when this society will become so widely known and so 
trusted, as it deserves to be, that all our ministers, secretaries, and business men generally 
will avail themselves of its rich advantages. I believe your society is one of the most purely 
benevolent institutions in our land.— Rev. Samuel Trenceus Prime, D.D., of New-York. 

We hesitate not to assign a very powerful influence to Life Assurance among the institu- 
tions and elements of that higher civilization which, in later times, has been evolved and en- 
joyed beyond all historical precedent. — North British Review. 

In my critical state, in view of my domestic affairs, next to the grace of God and the sympa- 
thy of my friends, I found my mind relieved by having, when well, taken out a Life Assu- 
rance policy. This arrangement was entered into with a well-regulated, old, and honorable 
company. From the standing of that company, I have not the shadow of a doubt, in case I 
had died, that the policy which I held would have been promptly paid to those dear to me. 
I desire to call the attention, particularly, of my brethren in the ministry to this subject.— 
Rev. Andrew Manship. 

It is every man's duty to provide for his family. That provision must include its future 
contingent condition. That provision, in so far as it is material, men ordinarily seek to se- 
cure by their own accumulations and investments. But all these are uncertain. The man 
that is rich to-day, by causes beyond his reach is poor to-morrow. A war in China, a re- 
volution in Europe, a rebellion in America, overrule ten thousand fortunes in every com- 
mercial community.— Henry Ward Beecher. 

I am free to express my opinion of its value, especially to men in the circumstances in 
which ministers of the Gospel are. I have wondered that they have availed themselves so 
little of the advantage of such institutions. I know of no way in which they could so well 
provide for their own wants in advanced years, or of their families when they die, as by 
availing themselves of these advantages.— Rev. Albert Barnes. 

Thousands have families growing up around them whose property depends upon the con- 
tinuance of the father's life. Should he die, the income would cease. The children must be 
withdrawn from school ; the mother and the eldest children must resort to every expedient 
merely to sustain the family ; and, in many cases, with the utmost exertion, this cannot be 
done ; the wife will return to her father for support, and the children, separated, must go — ■ 
the older to seek work, and the younger be distributed among friends. Such histories are 
of constant occurrence. — Henry Ward Beecher. 

It is the urgent duty of every Christian man, who is not unassurable, by reason of disease 
or other disqualifying causes, to procure, without delay, a Policy of Assurance in favor of 
those dependent upon him for support. All are liable to become unassurable on any day, 
therefore nothing should be permitted to delay this important duty. — New-York Express. 

The chief reason for urging Life Assurance upon the people is, that by its beneficent in- 
fluence all insurers are compelled to receive the boon of compounding their money, the value 
of which to the mass of mankind yet lies among the hidden arcana of monetary economy. 
Wealth is mainly aggregated together by this subtle influence, which is working as unconsci- 
ously as the rising and setting of the sun. — Hon. William Barnes. 

If Life Assurance was a mystery of finance, a speculation, a lottery or venture, a substi- 
tute for industry and frugality, or in any way a presumptuous distrust of Divine Providence, 
a good man might well shrink from it. But if it be founded upon sound principles ; if it 
deals not in uncertainties, but with sober and carefully ascertained facts, regulated by na- 
tural laws, and is as conformable to scientific truths as is any ordinary business of the me- 
chanic, the merchant, the farmer, then there can be no just scruples at Life Assurance, and it 
becomes a matter of prudence, and thus of duty. Once the question was, Can a Christian 
man rightfully seek Life Assurance ? That day is past. Now the question is, Can a Chris- 
tian man justify himself in neglecting such a duty 1— Henry Ward Beecher. 

Life Assurance is more efficacious in its operation as regards the moral and domestic 
comfort of the people, and in its tendency to reduce taxation by its reduction of pauperism, 
and possibly of crime, than the legislation of our wisest statesmen, and 'if universally 
adopted would be a national blessing. 



550 LIFE ASSURANCE GEMS. 

Those are the best husbands and fathers who prove their devotion by actions which con- 
• tinue to bless even after death. 

It is time our people understood and practised more generally Life Assurance. Many a 
widow and orphan have had great reason to be grateful that the advantage of Life Assurance 
was understood and embraced by the father. A large amount has been paid by Life Assu- 
rance Companies to widows and orphans, when it formed almost their only resource. — Benja- 
min Franklin, 1769. 

Life Assurance Companies not only undertake the equalization of life, but also the return 
of the same with compound interest. They are capitalists, constantly looking out for long 
investments, and well organized to deal profitably in securities.— Dr. Farr. 

Associations for the assurance of lives are to be ranked among the very noblest institu- 
tions of civilized society, and their usefulness can be attested by thousands of happy and 
independent families, rescued by their means from the bitterness of poverty and the degra- 
dation of charity. — Lord Brougham. 

It is unquestionably the duty of every man to provide, while he yet lives, for his own. 
We would say that it is not less his duty to provide, as far as he can, against their being left 
penniless in the event of his death. Indeed, between these two duties there is no general 
distinction ; for Life Assurance makes the one as much a matter of current expenditure as 
the other. One part of his income can be devoted to the necessities of the present ; another 
may be stored up, by means of Life Assurance, to provide against the future. And thus he 
may be said to do the whole of his duty toward his family, instead of (as is generally the case) 
only one-half of it.— Chambers 's Edinburgh Journal. 

Your affairs may become involved, and your property be taken for debt. Your stocks and 
shares may fall in value. But a thousand dollars assured upon your life cannot be taken for 
debt ; cannot be alienated from your heirs ; and if you have chosen your company discreetly, 
is subject to no commercial risks. It is as nearly sure as anything earthly can well be. — 
Henry Ward Beecher. 

Recurring again to the unfortunate persons who so suddenly lose their lives, we may not 
unaptly conclude in the words of the poet Gray : 

For them no more the blazing hearth shall burn, 

Or busy housewife ply her evening care ; 
No children run to lisp their sire's return, 
Or climb his knees the envied kiss to share. 

It was for the purpose of replacing to the family that amount of capital equivalent to the 
productiveness of one's labor, lost irrevocably by death, that Life Insurance was instituted, 
and most nobly does it perform its mission. You stand in precisely the same relation to 
your family that the house which shelters you does to its owner. If your house is uninsured 
and is destroyed by fire, the loss all falls upon you. If your life is uninsured when the 
"grim messenger" calls for you, the loss is all upon the family. Some one must take the 
risk, and it must be either the Company or the family. Which of the two are best able to 
assume it, the family or the Company ? Upon which of the two will the loss be least severe ? 
and upon whom do you prefer to leave the risk, upon your family or the Company ? Upon 
the latter the loss would fall as lightly as the " snow-flake on the sod." Upon the family it 
may prove a greater burden than they can bear. 

The man who has provided against the contingency of his early decease has done a simple 
act of prudence and justice which will be a source of mental comfort to himself, and regarded 
by his family as a proof of his wise affection for them. Should he desire a provision for his 
old age, he can, by a plan common with many companies, enter upon an annual income at a 
specified date, if he makes an annual payment up to that time. Should he wish an endow- 
ment for his daughters, he can avail himself of a method whereby such endowment will 
become due. In short, there are, in the very numerous and valuable developments of Life 
Insurance, safeguards against disaster to children and widows, and means by which many 
benefits can be realized even during the life of the insured. 

What more appropriate act than for the husband and father to calmly and by a firm 
contract, make provision that, should his wife and children be deprived of their living sup- 
porter and protector, they should not be entirely destitute or dependent upon charity for 
support ? 

Strange that man, who owes to his wife the chief charm of his existence, the every-day 
comfort of his life, should be able to look heartlessly to that period when their last parting 
shall take place— when removed to that world where, to him, all is hope and consolation— he 
shall have wilfully left her in darkness and desolation, steeped in poverty and wretchedness, 
to struggle with the hard justice of a hard-handed world. 

A Life Insurance Policy is the most valuable species of property, because it is available 
at the time when all other resources may fail ; when he is removed whose foresight and pru- 
dence provided it. It is the last to be relinquished in the event of misfortune. Its benefits 
may not even then cease ; for, if necessary, friends can continue it and be secured in their 
advances. 

What we do for Ourselves, will soon be forgotten ; what we do for others, may be the 
vision to cheer the soul when the eye can no longer behold our loved ones. 

Think of it !— The chance that your life will fall within a year is two per cent. The 
chance that your house will burn within a year is less than one-quarter per cent. Why insure 
the latter and neglect the former ? Life Insurance is not, like Fire Insurance, an expense, but 
a sure investment in time of greatest need. 

The question to be settled is precisely the same as in fire insurance. It is this : Is it not 
cheaper to let a responsible company take the risk than it is to take it yourself 9 Is not the 
protection offered worth more than it costs? 



CHAPTER IV. 

TONTINE INSURANCE. 

ITS DERIVATION AND EARLY HISTORY. 

From Appleton's New American Cyclopaedia, we extract a brief 
account of this scheme of Insurance: — 

Tontine is a kind of life annuity originated by Lorenzo Tonti, a Neapolitan, 
who published his scheme and introduced it into France about the middle of 
the 17th century. The subscribers were divided into ten classes, according to 
their ages, or were allowed to appoint their representatives, who were thus class- 
ed, and an annuity was apportioned to each class according to their age, the 
survivors having the benefit of an increased annuity as their associates died, 
and the last survivor receiving the entire annuity of the class till the close 
of his or her life. 

The first association of this kind was founded under the administration of 
Cardinal Mazarin, in November, 1653, and was called the "Royal Tontine." 
The total sum paid in was 1,025,000 francs, in 10 classes of 102,500 francs each. 
The subscription was 300 francs, and every subscriber received the interest of 
his investment until the death of some member of the association increased the 
dividend to the rest, and after the death of the last subscriber it reverted to the 
state. This project was not successful, nor were two others subsequently pro- 
posed by Tonti. In 1689, Louis XIV., finding his finances embarrassed, author- 
ized another of 1,400,000 francs, divided into 14 classes, according to age, from 
children of 5 years to adults of 70. In 1726, the last survivor of the 13th and 
14th classes was the widow of a poor surgeon who had invested in two Ton- 
tines her little capital of 300 francs, and who enjoyed at her death, at the age 
of 96, an income of 73,000 francs. Tontines were again resorted to by the 
French government in 1733 and 1754 ; but in 1773 they were interdicted as a 
measure of finance. In 1791, a Tontine called the Caisse Lafarge, on a more 
extended scale, was established under private management ; but by a gross 
blunder or fraud, the interest promised was an impossible one, and the sub- 
scribers, whose united contributions amounted to 60,000,000 francs, never re- 
ceived even simple interest, and the entire capital was lost in the disasters of 
the time. In England, Tontines have been occasionally resorted to as a mea- 
sure of finance, the last opened being in 1789, on which £42,032 interest was 
still paid in 1859. In the United States, Tontines have never been made a 
revenue measure by the government ; but in several cities there have been 
private annuities of this kind. 

Principally from the Prospectus of the American Tontine Life 
and Savings Insurance Company, of New-York, and that of the 
Tontine Department of the General Life and Accident Mutual In- 
surance Company, of New-Jersey, we present other facts touching 
this form of insurance. 

DIFFERENT SYSTEMS OF TONTINES. 

, There seems to have been nearly as great a variety in the systems of Ton- 
tines as in the various plans of Life Assurance, but all preserve the principle 
of association and survivorship. 

Two seem now, however, to be the prevailing systems in Europe, which 
may respectively be distinguished as the German and French systems. 



552 EUROPEAN TONTINES. 



THE GERMAN SYSTEM. 



In the German, the subscribers are classified by age, the classes being ar- 
ranged by decades of years : 

1st Class — Children under 10 years of age. 

2d Class — Children and persons between 10 and 20. 

3d Class — Persons between 20 and 30. 

4th Class — Persons between 30 and 40. 

5th Class— Persons between 40 and 50. 

6th Class — Persons all ages over 50. 

The shares may be paid in full, or by instalments. In the former case, a 
low rate of interest thereon is paid annually to the subscribers ; in the latter, 
the accumulations of interest are credited to the principal, until, with the paid 
instalments, the shares become full. 

When the number of members in a class is reduced to two-fifths by death, 
a dividend is made from the lapses or inheritances, as the shares of deceased 
members are usually termed. The sum to be thus divided among the survi- 
vors is converted into annuities, based upon the age of the youngest member 
of the class, which are paid with the regular interest dividends. 

It is, therefore, only after a long term of years, that the subscribers receive 
more than a moderate interest, although the last surviving members are richly 
compensated for their investments. In this scheme the final settlement de- 
pends, of course, on the age to which the life of the subscriber may be pro- 
tracted, and this may, perchance, in some cases, embrace nearly all the years 
of a century. 

THE ERENCH SYSTEM. 

The French system is more equitable, and better adapted to the practical 
ideas of our day. 

The classes are formed in nearly the same manner as the German, in regard 
to the association of ages ; but, in marked distinction from these, they termi- 
nate at fixed periods, the cycles ordinarily consisting of ten or twenty years. 
At their termination, the surviving subscribers withdraw the amount of their 
shares or deposits, with all the accumulations derived from interest and inheri- 
tances ; they then have the option of reinvestment in a new class, presenting 
the far greater inducements of the higher ages. 

Although this system approaches more nearly to equity than the German, 
yet its affiliation of ages — there being a difference varying from one to ten 
years between the members of a class — does manifest injustice to the older 
members, the younger having the greater chance to outlive the term or cycle. 
These latter should be charged a premium, in order equalize the risks of life. 

STATISTICS OF EUROPEAN TONTINES. 

Of the now existing Tontine Associations in Europe, those of France and 
Germany take the lead, their number and prosperity being a sure index of the 
popularity of their financial scheme and of their upright management. 

J. Dubroca, in his Revue des Assurances, 1850, says : " From the returns 
of eighteen societies in France, we find that, at the close of the year 1849, 
395,446 policies were in force, involving shares subscribed to the enormous 
extent of 398,936,114 francs, or nearly eighty million dollars, each share or 
policy entitling the possessor, if he survives his particular cycle, not only to 
receive its amount, but also to participate in a proportionate part of the other 
accumulations arising from death." 

Of these French Tontines, one of the most flourishing appears to be " La 
Caisse Paternelle," which numbers 41,739 policies, or shares, outstanding at 
the date of the last report in our possession (31st December, 1866), represent- 
ing 103,674,460 francs, or over twenty million dollars in gold. 

Another " La Prevoyance," established in 1820, reported in its printed returns 
of 1848, shares amounting to seventy million francs as subscribed for, of which 
thirty-one million francs — about six and a quarter million dollars — were paid 



THE AMERICAN SYSTEM. 553 

in. A cycle having been completed on the 31st December, 1849, M. Dubroca 
gave the amount of its engagements then as 58,000,000 francs, or nearly twelve 
million dollars. 

The Prussian " Renten Versicherungs Anstalt," of Berlin, takes the lead 
among the German Associations, having assets, according to their report of 
December 31st, 1861, amounting to 8,664,659 rix dollars, or over $6,000,000. 

The " Allgemeine Renten Anstalt," of Stuttgart in Wurtemburg, report in 
1863 a fund of 2,088,274 florins, not far from $1,000,000. 

These statistics furnish the best proof of the popularity of Tontine Institu- 
tions in Europe, and, having been in existence for a long number of years, the 
result proves that the great confidence in them has been fully justified. 

THE AMERICAN SYSTEM. 

Professor Elizur Wright, of Massachusetts, thus illustrates the American 
system : 

"The object of the Tontine Department is to accommodate those persons 
who wish to provide for their future wants, and especially for old age, by con- 
verting a given sum into the largest life annuity which it can purchase. 

" Life annuities are usually a fixed sum payable annually or oftener during 
life. But as only sound lives are likely to apply for them, a company, not to 
fail, must fix the price so high that none but very sound lives can afford to buy 
them. 

" The constant division among survivors of the subscriptions of the deceased, 
assimilates this to the Tontine companies that have been so popular in Europe. 
It embraces all that is valuable in their principle, and the annual payments 
may be properly called Tontine Annuities. 

" The simplicity and safety of the plan, and above all, the need, in thousands 
of cases, of a safe and permanent investment, which will provide adequately 
for probable old age, cannot but make this scheme a public favorite. 

" Life Insurance has become exceedingly popular, and it is an excellent thing 
for those who need it. Those who have no creditors or helpless persons de- 
pending upon them, do not need it. What they do need is an institution like 
this (which may well be called a Social Savings Bank), to which they may re- 
sort without expensive solicitation, and through which they may realize, while 
they live, the largest sure income from a given amount of capital." 

Mr. Fackler, of New-York, in the Insurance Times, says : " The difference 
between Tontines and Annuities is this : the Annuity income remains fixed for 
life, while the Tontine income increases rapidly as the recipient becomes more 
and more feeble with advancing age. 

" Tontines are the counterpart of Life Insurance, and may be styled the staff 
of old age, just as Life Insurance is the shield of the widowed and orphaned. 

" Hundreds of people in Europe have had their old age sustained in comfort 
and even luxury, through the liberal income obtained from a moderate sub- 
scription in a Tontine fund. 

" This excellent institution is now introduced into this country, with an im- 
provement which will recommend it to the classes most to be benefited by it. 

" Each member receives a fixed annual interest on his deposit ; and in France 
and Germany, young and old (if entered in the same year), share alike the 
lapsed deposits of deceased members, just as in the infancy of life insurance the 
same premium was charged at all ages. 

" The American improvement on the European plan gives to an old man a 
larger share of the ' lapses ' than to a young one, because the former runs a 
greater risk of lapsing his deposit by death, and will not be able to enjoy the 
benefits of the association as long as the other. 

" The exact method of division may be thus explained : 

" If one hundred men, at the age of eighty, deposit $100 each in a fund, and 
the mortality should be according to the Farr table, there will be fifteen lapsed 
shares the first year to divide among eighty-five survivors, so that each will 
receive jf x $100 (with a year's interest). If we make the same suppositions 
for one hundred men, aged fifty, we shall have two deaths and ninety-eight 
survivors, each having a share of ^ x 



554 THE AMERICAN SYSTEM. 

" From this it is clear that men of eighty and fifty, subscribing the same 
amounts to the same fund, should share the " lapses" in the proportion of 
|-| x $100 to -^g- x $100. So that, in general, when persons of all ages sub- 
scribe to the same fund, each should share in proportion to the quantity 
the tabular deaths at his present age , 
the number surviving to the next age P 

( = jx^j x deposit.) 

The actual deaths may be under or over the tabular expectation ; but the above 
proportion will give each member an equitable share of the same." 

ADVANTAGES CLAIMED. 

The Tontine Annuity Fund provides for the wants of a large class not met 
by either of the foregoing ; it offers the means of safe deposit, of a present and 
increasing revenue through life, and a permanent guarantee to those upon 
whom the stress of social movement falls with almost its entire force — the 
men who drive the working machinery of life in productive industry, com- 
merce, legislation, the professions and the church. 

It largely covers the ground occupied by Savings Banks, going beyond them 
in the immediate division of all the inheritances. It also covers in part the 
field occupied by Life Insurance ; for a deposit may be made in the interest of 
any friend or dependent, and the beneficiary will not in this case have a pe- 
cuniary interest in the death of his best friend. It is the complement of Life 
Insurance from the point where that stops ; for it provides for that large class 
of persons who seek to take care of themselves during life, and for that other 
large class who prefer to enjoy the use of their own funds in their own life- 
time. 

The old man will enjoy greater advantages with a large Tontine investment 
than with a large life policy to carry ; his chances for a green old age, peace- 
ful and protracted, are far better. The life policy requires a heavy expenditure 
to carry, the Tontine yields a large and increasing yearly revenue. It suggests 
moderation in all personal indulgences, and wise precaution in all the changes 
and vicissitudes of life, and is, in so far, an immediate premium on correct liv- 
ing. The child is not anxious for the death of the old man with an increas- 
ing annual income. The man who is well insured for the benefit of his family, 
should complete the family guarantee by investing in a Tontine for his own 
benefit ; the income of the investment will carry the insurance, and also the 
insured himself in time of need. 

Mr. Wright very justly calls this Tontine a " Social Savings Bank," for 
it is a Social Guarantee Fund ; safe, because invested in first-class securities ; 
provident of the means of life ; productive beyond ordinary investments, and 
more beneficial to society than almost any of the institutions aiming at social 
melioration. 

It may be well to point out some of the peculiarities of the Tontine system, 
distinguishing it from the schemes of Savings Banks and Life Insurance com- 
panies : 

1st. As to Savings Banks. 

These admirable institutions offer the security of their vaults and their in- 
vestments to depositors of the regular gains of their daily toil. And they offer 
the same guarantee for the payment of a moderate interest on these deposits. 
But in no contingency can the depositor look for the return of more than the 
money thus deposited and the interest thereon. 

2d. As to Life Insurance Companies. 

These institutions, just as admirable and beneficial in their peculiar sphere, 
offer to certain classes of the community a provision for families in the event 
of the death of the assured. But practically, by the necessarily high rates of 
insurance to invalids and those of advanced years, very many are precluded 
from bestowing upon their families this safeguard against want in the time of 
affliction. 

They appeal to the best affections of our nature, and deserve the patronage 
of all who have the aged, the infirm, or the helpless dependent on them. 



THE AMERICAN SYSTEM. 555 

Tlie American Tontine Department enters an entirely new field. In the first 
place, it does not contemplate the mere safe keeping of one's earnings, like a 
Savings Bank, nor the periodical payment of premiums, like a Life Insurance 
Company. The subscription once made, is final ; it is not to be renewed. 
Secondly, it is made either for the especial and personal benefit of the sub- 
scriber himself; in which case he may, if he so elect, enjoy the benefit of the 
interest of his subscription, from year to year, with the ultimate chance of re- 
ceiving back his subscription, increased by its proportion of lapses : or it may 
be for the benefit of a child or a friend, to whom the like benefits will inure. 
Thirdly, the contingencies of human existence may give him, at a time when 
weight of years and growing infirmities prevent his entering upon the indus- 
trial pursuits of life with a view to gain, an income far beyond what the same 
investment of capital could otherwise have brought him. 

And again, the system suggests, with a view to longevity, moderation in 
personal indulgences, and a wise care in all the changes and vicissitudes of 
life. 

Many persons in professions or trades are harassed by anxiety lest a present 
period of prosperity should prove evanescent, either through a financial revul- 
sion or failure of some of their faculties, and leave them with restricted means, 
or in a state of dependence, as age advances. 

By subscribing to a Tontine, they may render it certain that their means 
will increase the longer they live. 

Those who have no children or near relatives, and who have no object in 
saving for bequests, will naturally desire this mode of investment. If they 
die, they will not want the money ; if they live, they will require and receive 
all its benefits. 

Parents may subscribe in behalf of their children, with a view to secure an 
education fund for them at a given age, or a business or dower fund at the age 
of twenty-one years. 

To persons who have children for whom they have provided by a good edu- 
cation, or by an advantageous settlement in business, the system is equally 
useful ; since it will enable them, after they have thus fulfilled their duties, to 
avert the possibility of their becoming themselves a burden upon any member 
of their family. 

A husband may provide for his wife a constantly increasing income, which 
they will share together while both live, and which will remain to her until 
her death. 

For adults of middle age the immediate advantages are, perhaps, less strik- 
ing than at the earlier or at more advanced ages, the liability to death being 
much less ; but the promise of the future is, from this very circumstance, the 
more encouraging. Their deposits, if made for accumulation for a given term 
of years, will be increased largely through the double action of compound in- 
terest and coinheritance, the latter growing with an augmenting ratio every 
year. At the expiration of their term, they will find a much larger sum than 
they deposited, and by renewing the subscription for another term, they will 
find at its termination a result of the most surprising and highly satisfactory 
character. » 

At the more advanced ages, the benefits derived from inheritances in the 
Tontine will not only be very great, but they can be made available at once, 
as a substitute for ordinary annuities, with the additional advantage that, if 
made for a term of years, the investment may not be irretrievably lost. In the 
General Tontine Plan, the surviving depositor can secure an increasing annual 
income, with the option of withdrawing his money at the end of each term, 
and renewing the deposit for another term with still better results. 

Annuities granted by Life Insurance Companies remain the same for the 
whole life, and are based upon calculations in which a table of mortality is 
used, representing life much longer than it actually proves to be, and giving 
the companies a wide margin for their own security. On the Tontine princi- 
ple the actual mortality governs, and the margin is therefore gained for the 
mutual benefit of all the subscribers according to the risk each has run of 
death. 



CHAPTER V, 
ACCIDENT INSURANCE. 

Between" the years of 1864 and 1867, Accident Insurance in 
the United States became quite popular, and a great number of 
companies were formed, the larger part of which have in some 
way or other suspended operations. The Original " Travelers' " 
of Hartford, Ct., still holds on its way, strong as ever, and the 
" Casualty " of New-York is a popular company. A few others 
might be mentioned ; but on the whole, at present, this very desir- 
able form of insurance is not popular with the masses of the 
people. We predict for it, nevertheless, a steady and healthful 
growth. 

THEORY OF PROBABILITIES. 

" All nature is but art, unknown to thee ; 
All chance direction which thou canst not see." 

The Science of Probabilities has engaged the attention of some of the 
most profound thinkers of the world. It is enough to mention the names of 
Pascal, Fermant, and La Place. In an able work on this subject by a Belgian 
writer, M. A. Quetelet, a variety of interesting facts are given, showing how 
much of certainty can be predicated of what is generally considered certain. 
For instance, it is demonstrated that just such a relative number of white 
and black balls, in a given number of drawings, will be taken from an urn 
where they are mixed promiscuously together. Or, throw into the air five 
thousand times a number of pennies, say fifteen hundred. It can be reckoned 
beforehand just how many "heads" and how many "tails," in the whole 
number of throwings, will be up or down. Nothing would be more uncer- 
tain than whether it would be " head" or " tail" in one throwing of one 
penny ; but the average in many throwings of many pennies can jbe got at 
exactly. 

Strange to say, it was at a gaming-table that the existence of a law regu- 
lating chance operations, as they are called, was brought to light. The 
direct object, at first, in investigating the theory of probabilities, was to 
establish principles of equity between gamblers ; to determine the stakes, 
and to regulate the shares in case a player should quit the game before its 
termination. Thus, in an evil and hurtful practice, originated a valuable 
science. 

Indeed, everything is regulated by law ; only sometimes the law is too 
hidden to be detected. Strictly speaking, there is no such thing as accident. 
Chance is merely direction not understood. 

" There's a Divinity that shapes our ends, 
Eough-hew them as we will." 

It will be seen, then, that Accident Insurance, as it is termed, can be 
reduced to a science. It can be practised upon a legitimate and equitable 
basis. Just how many, and what kinds of accidents, and of crimes even, in 
the population of a country may be depended upon as sure to take place in 
a given time. Tables of risks can therefore be constructed. They may not 
be perfect as yet, but they are sure to be perfect when statistics shall have 
been fully gathered. The day is close at hand when accident-tables will be 



ACCIDENT INSURANCE. 557 

constructed on just as strictly a scientific basis as are life-tables. And for all 
practical purposes, they are now so constructed. 

A PUBLIC BENEFIT. 

" Our dangers and delights are near allies ; 
From the same stem the rose and prickles rise." 

Every friend of his race should rejoice in the rise and progress of Accident 
Insurance Companies. In the words of Mr. Quetelet, " It is both consolatory 
and moral that men should unite and assist one another to combat the 
sources which menace them incessantly, and that by means of small sacrifices 
in the days of prosperity, they should husband for themselves powerful 
resources against times of misfortune. It is the accomplishment of one of 
the first duties of Christian charity. We should think kindly of the science 
which tends to regulate this duty according to the principles of justice, and 
which studies the means of making it produce the most useful results with 
the least possible sacrifice." 

The establishment of associations for insurance against every class of acci- 
dent should therefore be welcomed to every civilized community. They 
have arisen like good Samaritans, who stand by the road-side ready to ad- 
minister oil and wine to those in distress. 

WHAT IT PROPOSES. 

" The means that Heaven yields must he embraced, 
And not neglected." 

Accident Insurance proposes to lighten the calamities that generally attend 
physical injuries. It gives so much per week where a man is disabled from 
following his usual avocation, by accident in travelling, or by any forms of 
dislocation, broken bones, ruptured tendons, sprains, concussions, crush- 
ings, bruises, cuts, stabs, gunshot wounds, poisoned wounds, burns and 
scalds, freezing, bites of dogs, unprovoked assaults by burglars, robbers, 
or murderers, the action of lightning, the effects of explosions, chemicals, 
floods, and earthquakes, suffocation by drowning or choking, and the like 
— in short, by any accident. 

And in case of death, from the accident, either at the moment or after- 
ward, it gives so many hundreds or thousands of dollars to his family at 
once, besides having paid his weekly compensation while living. 

WHO NEEDS AN ACCIDENT POLICY. 

" They that fear the adder's sting 
Will not come near his hissing." 

He who is never exposed to an accident of any kind does not need a policy. 
But the mechanic, handling edged tools ; the mason and builder, working 
on lofty scaffolds ; the tinner and painter, climbing high roofs and long lad- 
ders ; the machinist, the armorer, the factory operative, working among 
moving machinery ; the commercial or travelling agent, constantly journey- 
ing on cars, coaches, and steamers ; railroad conductors and employes gen- 
erally ; all travelling for business or pleasure ; all these need a general acci- 
dent policy. And not only these, and persons of more hazardous occupation, 
but merchants, manufacturers, lawyers, physicians, clergymen, bankers, 
brokers, insurance officers and agents, clerks, students, editors, authors, poets, 
musicians — all men, of whatever trade or profession, or of none at all, ex- 
cept those who are never exposed to accident, need a general accident 
policy ; and of these, we may say, there are none. 

A RETROSPECT. 

No species of insurance, we think, ever made such rapid progress, or so 
soon gained for itself popularity with the public, and a position in the insu- 
rance world, as has the last new feature, viz., insurance against accidents. 



558 A RETROSPECT. 

Some twenty odd years ago, when Life Insurance was first introduced in 
this country, the wiseacres of that day laughed at it, predicted its early 
failure, and seemed almost inclined to pity the innocent ones who had taken 
a policy, paid the premium, and thus been victimized. To-day matters wear 
a very different aspect. The enterprising and public-spirited men who then 
took hold of, and pushed ahead an institution which they knew, if successful, 
must be of great value to both the rich and the poor, are honored and 
respected by the living, and deeply and earnestly blessed by many a widow 
and orphan, who but for them and their labor would now be in suffering and 
want, if trouble and suffering had not tempted them to crime, or caused them 
to perish miserably. 

This great end, however, was not attained in a day nor a month, but took 
years of patient labor. Many and severe trials were met and great obstacles 
overcome ; objections of all kinds were offered — some very trivial, but some 
seeming sound and sensible. 

The poor were urged not to go into it, as it was at best but an experiment, 
and the probabilities were that they would lose their money. That it was 
acting in defiance of the laws of God, and that at best it could not prove 
much of a success. The rich as a class, either paid no attention to it at all, 
or thought there was no chance of its ever amounting to anything worthy of 
their attention. But, with all these discouragements, and with the know- 
ledge that their labors were not for themselves but for the benefit of their 
fellow-men, the noble-hearted men who originated the idea pushed bravely 
steadily, and perseveringly on. 

One by one the number of policy-holders was enlarged. Little by little 
the capital was increased, and slowly yet surely the field for labor was ex- 
tended, until now Life Insurance ranks among our most respected institu- 
tions, and Life Insurance Companies among the most wealthy corporations 
in oar country. The amount of good they have done is very great ; the 
amount they will do is incalculable. 

Yet with all the advantages and benefits offered by Life Insurance compa- 
nies, there was a void, a something wanting. That something is now sup- 
plied by the " Accident Insurance." It not only protects the widow and 
children in case the husband and father is killed by accident ; but if he is 
injured and cannot earn the money necessary for their support, steps in, pays 
to the injured man a weekly compensation of from $5 to $200 per week, 
thus saves his family from want, procures for him the necessary medical 
attendance, and saves him from debt, till he is again able to commence 
work. 

The calculations have been made very carefully ; the most reliable statis- 
tics have been obtained. Experienced and able men have examined into the 
subject thoroughly and in all its details, and they now present to the public 
this grand system of self-protection against injury and against death, at 
rates of premiums so low as to be within the reach of every man. Its 
success thus far has been unparalleled; true, the public mind, from its 
long acquaintance and familiarity with life insurance, was prepared to 
receive it and appreciate its value ; but even granting all this, its rapid 
advancement has astonished the oldest and most experienced underwriters. 
As it becomes more widely known, and the good it is daily doing is more 
prominently placed before the public, we believe it will become a sort of 
household word. When in passing along the street, we see, or through 
the newspapers hear of a man knocked down and run over, shot by some 
cowardly burglar, bitten by some mad dog, or injured in any way by the 
thousand and one accidents to which we are all liable, and know that the 
payment of a few dollars has made or would have made him comfortable, 
financially, at least, while disabled, or, if killed, provided for his family, who 
will feel entirely happy and satisfied unless he is the holder of a General 
Accident Policy? — Insurance Monitor, Feb. 1866 



RISKS TO HUMAN LIFE ON RAILWAYS. 559 



ADMONITORY FACTS. 

From indisputable statistics, it is computed that 2,000,000 persons receive 
injury, every year, from accidents of a more or less serious character, and are 
often maimed for life ; and that of these, 10,000 are killed or die, from the 
direct effects of accidents ! This is a terrible warning, and should make us 
all less reliant as to the duration of our lives ; for at the most unexpected 
moment we may happen to be killed or sadly maimed. 

ACCIDENTS IN CITIES. 

" Here laden carts with thundering wagons meet, 
Wheels clash with wheels, and bar the narrow street." 

It appears from two parliamentary returns that, during the year 1865, 140 
persons were run over and killed in London, and 1,707 were maimed or 
otherwise injured from the same cause. During the year 1866, up to the end 
of February, 23 fatal cases occurred, besides 231 cases of injury. In the city 
police district, 14 persons were run over and killed last year, and 207 were 
maimed or injured ; 3 were killed this year, and 30 injured. 

In the city of New-York, for the week ending May 12th, 1866 (according 
to the report of B. Harris, Registrar), the whole number of deaths was 432 — 
of which twenty-three, or five per cent, of the whole number, were deaths by 
accident or violence. Twelve of them were from carriage or street accidents. 
The number of non-fatal accidents in the same week is counted by hundreds. 
There is nothing remarkable in this return of deaths and injuries by acci- 
dent. It is reported, substantially, from week to week through the year, 
and in every large city. What an argument for accident insurance ! 

RISKS TO HUMAN LIFE ON RAILWAYS. 

Accurate statistics have developed some interesting facts in England and 
on the Continent of Europe, respecting the risks incurred by passengers and 
employes on railway trains. Few persons in the respectable walks of life 
trouble themselves about the probability of their being hanged. Yet an Eng- 
lishman's risk of dying by strangulation is sis times as great as of being 
killed on a railroad, whether by his own carelessness or by accident. If his 
own carelessness be excluded from the estimate, Ms risk of death by hanging 
is one hundred and thirty times as great. Ninety-nine times as many people 
die of cancer in England as are killed on railways. Excluding the element 
of carelessness, two thousand one hundred and sixty-five persons will die of 
cancer to one killed on a railroad. 

The statistics of railroads in all countries of Europe, prove them to be 
attended with less danger than any other mode of travelling. More jwrsons 
are killed in Paris in a single year by carriage accidents, than in all France 
by railroads in ten years. 

* The statistics of European railways bring out some very droll results — if 
such an epithet is admissible in treating a subject that pertains to human 
life. They show that the absolute risk of a person's losing his life in a rail- 
car, is less than of his being struck by lightning or being hanged ; that a 
passenger shooting along by steam power at a rate of seventy-two miles per 
hour, is more secure from bodily injury than the pedestrian in a crowded 
city, or a gentleman driving his private carriage on a country road ; and that 
the oil-begrimed and sooty pair who ride on the engine, on whom we 
look with pity, as predestined for destruction, have an average immunity 
from danger, and enjoy a better state of health than we, whose persons may 
be more presentable, but whose pity is entirely gratuitous. A person debili- 
tated by dyspepsia or pulmonary disease would question the sanity of his 
physician if recommended to take the position of fireman on a locomotive ; 
yet statistics show that the employment tends to counteract these diseases, 
and to strengthen all the vital functions of the system. 

The satisfaction we feel in reviewing these results is qualified by the re- 



560 A CALAMITOUS RECORD. 

gret that no statistics of any of our American railroads, equally favorable, 
are accessible. — Philadelphia Daily News. 

NEW HAZARDS. 

" The grand motor " of modern times, the steam-engine, which has con- 
tributed immeasurably to spread the comforts and facilities of civilization, is 
a terrible power which has too often burst its bonds, and in an instant hurled 
its human attendants into eternity or mutilated them so frightfully as to 
render death a coveted boon and relief. Thus an undoubted blessing to 
many millions proves sometimes a sudden and terrible curse to a few. And 
these few are generally poor, hard-working men, who, if killed outright, 
leave families exposed to destitution and suffering, and who, if wounded and 
disabled, lose, as do also their dependents, their only means of support — the 
wages of their daily toil. 

A NOTE OF CAUTION. 

When one is in full enjoyment of health and strength, he is apt to 
feel, if not to think, that he is inaccessible to any disasters. His lungs inhale 
the invigorating atmosphere. He takes his food with relish, and is stimu- 
lated by it to earnest action. His work is a pleasure, and he goes to bed not 
because he is tired, but as a sort of habit he has got into. Suddenly he gets 
his hand into the machinery, is smashed by the street or railway cars, slips 
(up or down) on the ice, or meets one of the ten thousand other accidents in 
ambush lying ; and that which was the minute before the incarnation of 
vitality and productiveness, is a helpless man. In the defiant spirit which 
health engenders, he has made no provision for such conditions — has freely 
expended his earnings, and now for weeks, perhaps for months, is compelled 
to witness the privations and sufferings of his family without the power to 
relieve them. 

And how bitter must be the reflection, that the relief, now so necessary, 
could be afforded by economizing a few cigars, or some other useless luxuries. 
Or in other words, the momentary satisfaction of other days must now be 
paid for, by the present sufferings of his family. Have we a right thus to 
jeopardize the comfort of those we have called around us and caused to be 
dependent ? 

Our wealthier classes are not thus unprov'ded. They protect their persons 
and property by every mode of insurance, and those whose only capital is in 
their head and hands would do well to follow their example. 

STATISTICS OF 1866. 

This branch of insurance has been pursued during the past year with a 
good deal of activity and emulation, and with varying success. Six com- 
panies have been added, in regular compliance with our laws, to the number 
doing business in the State ; and three have withdrawn or ceased to do 
business here or elsewhere. 

The amount insured by the Accident Companies in this State during the 
last year was $27,141,000, an increase of nearly $20,000,000 over the pre- 
ceding year. The premiums collected amounted to $145,583.90 — an increase 
of $108,517.30 over the preceding year. Of the whole amount of premiums 
received by the companies, about 27 per cent, appears to have gone for losses 
paid on policies ; about 67 per cent, for working expenses and dividends to 
stockholders, and about 6 per cent, to surplus. — Massachusetts Report. 

A CALAMITOUS RECORD. 

If the following enumeration of losses contained also a statement of the 
compensation made for them by insurance, we should find that the insurance 
on the lives and limbs of human creatures did not amount to one-tenth of 
that effected on merchandise. 

" During the quarter ending December, 1865, the losses in one hundred 
and ten considerable fires throughout the country are reckoned above 
$20,000,000, and those for the whole year double the year previous, and far 



A CALAMITOUS RECORD. 561 

exceeding many former years. Tliis is accounted for by extraordinary losses 
in certain fires, such as the burning of cotton, and Government and city 
warehouses, and one or two extensive factories. Seventy-five fires occurred 
in New- York State, with a loss of nearly $8,000,000. Twenty-five houses 
were destroyed in a single fire at Lima, N. Y., and one hundred in Belfast, 
Maine. The severest loss of life during a fire occurred at Charleston, where 
a score of people were killed by falling walls. Cotton burned at store and 
on ship-board amounted to about 7,000 bales. In nine years the total in fires 
of $20,000 and upward falls short of $72,000,000. 

" We are here generally estimating only land and house fires, and perhaps 
not in all respects from an insurance point of view. Let us add a review of 
the recent quarter, ending with the last of April, 1866. In thirty-eight fires of 
$100,000 loss and upward, the total destruction amounted to $10,670,000. 
We compare this with the former quarter, in which thirty-eight fires of the 
same degree occurred, with a general reported loss of more than $18,000,000. 
The chief losers have been the cities of New-York, Cincinnati, Philadelphia, 
Buffalo, the oil regions, the Michigan Central and Pennsylvania Railroads, 
and the general Government. Cotton, amounting to between $3,000,000 and 
$4,000,000, was burned in Mobile. Pike's splendid opera-house was lately 
destroyed in Cincinnati ; and in the last eight months, chiefly in the quarter 
just past, a score of fires dried as many wells in the oil regions. Fires on 
ship, steamboat, and railroad have not yet been reckoned, but make up a 
large supplement to the other volume of losses by fire. The amount of 
cotton thus destroyed in the last two quarters would easily reach 12,000 
bales — a fact of further warning against careless shipment and storage. 

" Statistics of railroad disaster are still of prevailing interest, and full of 
grave suggestion. From September to January, the number of accidents, 
involving loss of property and life — say at least an average of two deaths 
to each occurrence — were 76, of which 23 were outright collisions. In 8 
cases trains were precipitated ; 8 were explosions ; in 3, bridges broke down ; 
in 4, switches were misplaced, and in one or two instances the cars ran off 
trestles. On several railroads as many as three or four locomotives were 
destroyed in twenty-four hours. The railroads of New- York were debited 
with 20 accidents. On all the railroads of the country, estimating from the 
quarterly figures, the accidents were not far less than 200 during the year 1865. 

" Here it is worth while making a general count of explosions. Out of 31 
which occurred between September and January, 8 were on railroads, 10 on 
steamboats, 8 in shops and factories ; 4 were from gunpowder, and one from 
glinoin oil, or nitro-glycerine. Between January and May occurred 28, some 
of them of most terrible character, and nearly all explosions of engine- 
boilers. By the explosions of the steamers Missouri and Miami, and the 
steamboat Carter, on the Ohio and Mississippi rivers, more than 400 lives 
were lost. The new explosive essence, known as nitro-glycerine, has already 
cost three accidents, and nearly 100 lives. By 58 explosions, in the last eight 
months, it is not improbable that 1,000 persons have been killed. This dry 
statement is the index of most appalling catastrophes. 

" Steamboat accidents and losses have a similar painful variety. Out of 70 
boats lost or destroyed, principally on the Western rivers, 13 had collided, 
10 exploded, 7 were burned, and 9 lost through leakage. Five disasters took 
place on the lakes, for 7 or 8 on the Mississippi ; 12 steamboats and barges 
were lost by the St. Louis ice gorge. By the explosions and collisions 
probably 300 lives were lost. In the succeeding quarter we reckon 42 
steamers lost ; but these include such fearful disasters as the burnings and 
explosions of the steamers Missouri, Miami, Carter, and Lockwood, with an 
aggregate loss of about 500 lives. Altogether, 117 valuable steamers, and 
their more precious freight of human life and wealth, have been sunk or 
destroyed in eight months. Add to the calendar 75 marine disasters, 4 of 
them collisions and 8 burnings, with a loss of 259 lives, in the quarter 
ending December : and 48 wrecks between January and May, with about 170 
lives lost, most of them in the steamers Constitution, Narcissus, and other 
vessels — an aggregate, for eight months, of 123 disasters, costing 429 lives. 



562 STATISTICS OP ACCIDENTS. 

In these eight months the earthquake showed several alarming symptoms 
in California, and a storm on the Gulf coast swept away a number of 
villages. Recapitulating, we observe that in the. last two quarters occurred 
217 accidents by which railway cars and steamboats were destroyed, 56 
severe explosions, and 123 shipwrecks on the American coast. It is not a 
little remarkable that disasters to inland travel have been more frequent 
than upon the sea." — New-York Tribune, 1866. 

FATAL ACCIDENTS. 

Statistics demonstrate the steady increase of the number of deaths by 
accidents, not only in the United States, whose people are proverbial for fatal 
speed and recklessness, but also throughout Europe. Various are the 
reasons for the growth of these calamities, none of which appear conclusive, 
but the fact is established beyond question. Many are ready to ascribe this 
evil to the machinery and appliances of civilization ; but we are informed by 
the great statistician, Mons. A. Legoyt, the head of the General Statistical 
Department of France, who has devoted much research to the subject, that 
the rate of accidental mortality in the most thickly-peopled, industrial, and 
manufacturing states of Europe, such as Belgium and Saxony, is far lower 
than that which obtains even in Norway and Sweden, and that fatal casual- 
ties, especially those happening to children, are more numerous in the coun- 
try than in the cities. 

We are of course speaking of the accidental mortality occurring among an 
equal number of the respective inhabitants of the localities compared. In 
France the ratio increased during thirty-three years about one-fourth, and 
it appears elsewhere to exceed the growth of population. The eminent 
authority to which we have referred also informs us that the accidents 
resulting fatally which happen in England, Norway, and the United States 
are from 575 to 682 among each million of their inhabitants, while among 
the same number in Russia, Spain, and Denmark, only from 201 to 232 such 
casual deaths occur. To 100 males who perish accidentally, from 25 to 33 
females die in a similar manner, except in the United States, where this 
fortuitous mortality among women is at the ratio of 46 to the 100 above 
mentioned. This disparity between American women and those of other 
countries appears inexplicable. It is generally conceded that the Americans 
are the best of husbands, and more than any other people regardful of the com- 
fort and safety of the fair ; and, unless the latter are liable to be killed with 
kindness, we are at loss for a solution of the enigma. This accidental 
mortality is, however, by some attributed to the fact that the duties assumed 
by American women approximate too closely to those formerly regarded as 
exclusively masculine. If this supposition be correct, it should serve as a 
terrible warning to the strong-minded who are so anxious to abolish the 
conventional distinctions between the sexes. 

In the United States the majority of accidental deaths is caused by burns 
and scalds ; in England, by contusions or crushing ; and elsewhere by drown- 
ing. Falls, asphyxia, freezing, and drunkenness follow, according to a 
decreasing scale, as causes of fatality. More women than men perish by 
burns ; and among those who drown, boys are the most numerous. Children, 
of course, form a large proportion of those who die by accidents ; and burns, 
and scalds, and poison are more often productive of fatal result to them than 
to adults. More accidental deaths occur in summer than in winter, because, 
during the former season, men are more generally engaged in navigation and 
other out-of-door and hazardous employments. 

VALUABLE STATISTICS OE ACCIDENTS RETURNS FROM EUROPE 

AND THE UNITED STATES. 

Mons. A. Legoyt, the head of the General Statistical Department of 
France, and Secretary of the Statistical Society of Paris, has recently 
concluded researches concerning "Accidents in Europe and the United 
States." The first questions with which the French statistician has busied 



STATISTICS OF ACCIDENTS. 563 

himself arc — first, the ratio of accidents to the population ; second, their 
ratio to the general mortality of each sex ; and third, their ratio as regards 
the female population, the male standard being taken at one hundred — in 
the different countries which enter into the comparison here made. 

The proportion of fatal accidents to the population varies between the 
maxima of 632, 679, and 575 to a million of inhabitants in England, Nor- 
way, and the United States, and the coefficient minima of 201, 202, and 
232 of liussia, Spain, and Denmark. It is evident from such variable pro- 
portions that the determining causes of fatal accidents must be of very 
complex nature, and cannot be explained simply by what may be called the 
economic character of different countries. In fact, if the predominance of 
manufacturing and mining industries justifies the exceptional rate of fatal 
accidents in England, and to a certain extent in the United States, it 
surely cannot do so as regards Norway, the duchy of Oldenburg, and Sweden. 

M. Legoyt has been able to compare only a small number of countries, 
when the immediate causes or nature of accidents are considered. With 
the exception of England, where contusions and injuries (classified under 
" crushing and bruising"), and of the United States, where burns and scalds 
occupy the first place amongst accidents, " submersion" is the cause of the 
greatest number of deaths. Next come falls from an elevation ; then burns, 
crushings, and asphyxia. Among the Scandinavian countries the large 
number of " congelations " is not to be wondered at ; but there must evi- 
dently be some error as regards Spain in this particular. So, also, while we 
are not surprised to find " alcoholic excesses" play an important part in 
Russia and Sweden, we are struck by their insignificance in England, 
Denmark, and the United States ; some fallacy, we suspect, likewise lurks 
here. It is with respect to " burns " that the ratio of fatal accidents rises 
higher amongst women than amongst men. 

M. Legoyt's researches tend to show that accidental deaths nearly every- 
where increase more rapidly than does the population. In France, for 
example, the following successive and increasing ratio has taken place : 15 
fatal accidents to 100,000 inhabitants from 1827 to 1830 ; 16 ditto from 1831 
to 1835 ; 19 dittto from 1836 to 1840 ; 22 ditto from 1841 to 1845 ; 24 ditto 
from 1846 to 1850 ; 25 ditto from 1851 to 1855 ; and 28 ditto from 1856 to 1860. 
No doubt some of this increase is due to the more exact character of recent 
enumerations ; still, the continuously progressive rate which is here seen 
indicates a sure though lamentable onward movement. Children appear to 
constitute a high proportion of the victims of fatal accidents. In Bavaria, the 
latter form a very large part of the causes of mortality of childhood and 
adolescence from birth to twenty years of age, and within this range the 
maximum is attained between the time of birth and five years. Submersion 
is the more frequent cause — particularly as regards male children — of the 
fatal event. Burns and poisoning are frequent in tender years ; but, 
strangely enough, children are less frequently victims in towns than in 
country districts. 

The ratio of females to males as regards accidents tends to increase, 
probably with the participation of the former in industrial occupations. In 
Bavaria and in Saxony, the ratio is highest during early infancy, and in the 
former state lowest between forty and fifty years of age. At every age it 
attains its maximum through " burns," which in Bavaria are more common 
during summer than in winter. Women more frequently succumb to 
burns, suffocation by fire, submersion, and poisoning. Fatal accidents are of 
much more frequent occurrence in summer than during the other three 
seasons of the year. This is due, probably, to the fact of the former season 
being the chief one for out-door operations, navigation, etc. It is a fair j>re- 
sumption, also, that the smaller number met with in towns as compared 
with country districts is due to the greater vigilance of authority, and the 
more exact surveillance of parents, generally put in force in towns. London, 
Berlin, and Stockholm illustrate this conclusion very notably. From 1852 to 
1854 Paris likewise was in the same category ; but from 1855 to 1861 it 
occupied the opposite position. 



INDEX. 



Page 
ABSTINENCE, its importance and effects 138 

Accident Insurance 556, 563 

Accident Insurance, benefits of 557 

Accidents, Statistics of 559, 560, 562 

Accumulation, necessity of 538 

Actuarial Board, constitution of the 530 

Accumulated Fund, necessity for 350 

" What should be its amount. .350, 351 

Accounts of a Life Office 355, 425, 438 

" Publication of 432 

Ackworth, average duration of life in 83 

Actuary, influence of 420 

Addison's "Vision of Mirza" quoted 164 

Adjustment, necessity of 157 

Advantages of Life Assurance. ..374, 375, 376 

Agents, knowledge required by 75, 414 

Ages of Assured Lxves 238, 239 

Ages first inserted in parish registers 19 

Agriculturists, duration of life amongst. . 75 

Agent, essentials of a good 536 

American Tontine Insurance 553 

American Physique, the 541 

America, cases of longevity in 139 

Census of 171, 172 

" See United States. 

Amicable Office, origin of 30, 214 

" Constitution of 37, 40 

"Experience" Table. . .i77, 239, 242 

Amsterdam, duration of Life in 83 

Annuities, Tontine, origin of 14 

" Why they did not succeed, 14 
" Some of the early schemes for 

granting 31, 32 

" Errors of these schemes ex- 
posed 36 

" How calculated 274, 275, 276 

" Principle of 276 

" Losses to the Government by, 158 

Annuitants, their wonderful longevity 143, 144 

Apoplexy, deaths from 150 

Apostles, duration of life amongst 140 

Arson, inducements to 488 

Artists, duration of life amongst 141, 142 

Assets of New-York Joint- Stock Fire 

Companies 497, 503 

Of New- York Mutual Fire Com- 
panies 498, 504 

" Of companies of other States and 

foreign countries 498, 504 

Assheton, Rev. Wm. , assurance scheme of, 28 
Assurance and Insurance, distinction of, 5 

" Accounts 354, 355 

" And mercantile balance-sheets 

contrasted 313 

" As an investment 367 

" Balance-sheets, objects of, 420, 421 
" Corporations, first establish- 
ment of. 12, 13 

" Fund, its proper proportions, 347 
" " Its progress, 

195, 347, 351, 353 



Page 
Assurance Magazine, organ of Institute 

of Actuaries 62 

" Offices, situation of the early 

ones 31 

- " Proiects 28, 29, 30, 31 

Societies, safety of 371, 372 

" Valuations, items in 314 

Assured life, experience of 180, 239 

Asthma deaths from, 150 

Audit of Assurance Accounts, necessity 

for 437, 438 

Audley and his schemes 15 

Austria, annual rate of mortality in 81 

Average, general 458 

BABBAGE, Charles, tables on longevity, 137 

Bachelorism and old-maidism 89 

Bacon, Lord, quoted 135, 142, 152 

Baily, Thomas, work on longevity ... 137, 138 

Bakers, mortality amongst 78, 143 

Balance-sheet, a model one 438 

Bank Discounts, rate of 209 

Banks, laws relating to 437 

Baptisms, proportions of male and fe- 
male 128 

Barnes, Hon. Wm., of Albany 189 

Barnes, Superintendent, on fire risks 493 

Bath, mortality of 128 

Beard, Dr., on occupation and longevity, 533 
Beershop-keepers, mortality amongst ... 78 
Berlin,observations on the mortality of, 50, 82 

Bernouilli, J., his great work 25 

Bernouilli, N., calculations of 25 

Bethnal Green, mortality in 84 

Bills of Mortality, origin of. 19 

Birmingham, proportion of deaths in — 121 

Births and Birthplaces of the people, 86, 89, 124 

" Illegitimate, statistics concerning. . . 86 

" Influenced by the seasons 19, 87 

" " " Price of food 90 

" No criterion as to numbers 121 

" Proportions of male and female 87 

" Proportions in England and other 

countries 86 

Bolton, mortality in 84 

Bonus, signification of the term 301 

Bonuses in Mixed and Mutual Offices 229 

" Erroneous notions respecting 302 

" Objections to the system of. 338 

" Relative advantages of the several 
" modes of declaring them, 332, 333, 386 

" Reversionary, evils of 339 

Bottomry, antiquity of contracts of 452 

Brandenburgh, observations on mortality 

of 50 

Breslau Table, origin of. 21 

" Observations on the mortality of, 50 

Bronchitis, deaths from 149 

Bubble Companies, definition of 59, 60 

" " Some of the early ones, 52 
" " Periodof 54 



506 



INDEX. 



Page 

Bubble Companies, Accounts of 437 

Buffon, M., work on Life Assurance 23 

" On the duration of life 146 

Bulmer, Captain John, his scheme 32 

Butchers, mortality amongst 78, 79, 143 

CALIFORNIA Insurance law 490 

Canton De Vaud, mortality of 50, 83 

Canada, law of Life Insurance in 532 

Canada, American Insurance Companies 

in 492 

Capital of New-York Joint-Stock Fire 

Companies 495 

" Of New- York Mutual Fire Com- 
panies 496 

" Of companies of other States and 

foreign countries 496 

Capital, uses of. 222 

Carnaro, his rules for living 151 

Carlisle, mortality of 128 

" Table of Mortality. . 50, 162, 163, 175 
" " Its effects on the progress 

of Life Assurance .» 51 

" " The best guide for healthy 

life 175 

" " Peculiarities of 176 

Will yield a profit . . . 291, 307 

Cash Bonuses explained 333 

Casper, Dr. (Berlin) quoted 96 

Casualty Insurance as early practiced .... 13 

" " As now practiced 14 

Cautions to the employed in selecting an 

Office 415, 416 

Celestial Gifts, the three 136 

Census, numbers at the last 80 

' ' Almost every country but Turkey 

has one 80 

Chamber of Life Insurance, report of the, 528 

Chance, the laws of, Simpson on 22 

" " Other writers on — 23 

" Of dying at a given age of a given 

malady 75 

Chancery, Companies winding-up in 58 

" Charge" on Life premiums. . . . 273, 277, 282 
Charters, premiums paid for them by the 

early Companies 12 

Cheap premiums, evils of 418 

Chester, observation on the mortality of, 50 

Child-birth, deaths in 90, 150 

Chinese Divisions of Life 80 

Chronological Table of the present Insu- 
rance Offices 66 

Cities, mortality in 82, 128 

City Life, its effects on the mental powers, 129 

Claims, Offices that have not paid their... 58 

" Importance of prompt settlement, 

254, 266 

Clergy, mortality amongst the 75 

' ' Their average duration of life 143 

Climate, its effects on health 515 

Coal-mine accidents, statistics of. 106 

Companies winding-up in Chancery 58 

Comparisons, their value 82 

Compensation, operation of the law of..... 170 

Competition in former times 47 

Conjecture, dangers of in Life Assurance, 158 

Connecticut law of Fire Insurance 492 

Consols, price of 208 

Constantinople, density of population in, 83 

Consumption, deaths from 149, 246 

Constitution of the Actuarial Board of 

the United States 530 

Contribution Plan, mathematical demon- 
stration of the 524, 527 

" Cooking " of accounts 304, 417 

Copenhagen, density of population in 83 

Corn, price of, and its influences 118 

Cornwall famed for its cases of longevity, 136 
Corporation of London Insurance project, 17 



Page 

" Correction, 1 ' meaning of the term 157 

Country and Town districts, relative 

mortality in 84, 121 

Country and Town life, relative effects of, 129 

" " Contrasted 180 

Craig, John, his mode of converting Jews, 25 

Crisis in Fire Insurance 487 

Crusades, risks attending them insured, 13 

DAVY, Sir Humphrey, quoted. 144 

Death, Dr. Granville on 101 

" Buffon on 103 

" Dr. Buchanan on 102 

" Gompertz on 103 

" Eeid on 102 

Deaths, their number and causes 99 

" Average of 100 

" By accident 106 

" By suicide 108 

" " Conditions as to.. 250, 2C5 

" Classification of causes . . 99, 100, 149 

" From confinement in prisons 107 

" From mental suffering 108 

" Effect of early, on population . . 121 

" In child-birth 90,150 

" Infantine, causes of 88 

" Influence of the weather on 101 

" In London 85,101 

" Sudden 101 

" Violent, increase of 104 

" " Statistics and causes of .. 108 

" Unnatural 121 

Death-rate of the United States for 1860, 512 

Deaths, ratio of in Europe 517 

Declined-lives 245 

Decreasing premiums, advantages of 254 

Decrements of life 162 

" Males 79 

Defunct Companies 61 

D'Eon, Chevalier, wagers concerning his 

sex 33 

De Moivre, his mode of calculating Annu- 
ities 161 

Denmark, annual rate of mortality in 81 

Deparcieux's French Table of mortality, 

171, 186 

De Wit, his early speculations 161 

Diseases and causes of death 519 

Diseases most fatal in the United States, 521 
Dividends of Fire Insurance Companies, 

per centage of to capital. 476 

Dove Percy, M., diagrams by 189 



EASTON, James, work on longevity — 

Ecoiwmic Experience Table 177, 

Education, its tendency to prolong life . . 

Educational and Misfortune Funds 

Effingham, Thomas, account of 

Egyptians, their customs in midwifery. . 

Emigration, effects of, on population 

Endowments, early mention of 

England, annual rate of mortality in, 81, 
tl - Proportionate density of its 

population 

English love of travel illustrated 

" Life-Table, earliest (Halley) 

" " (Farr) decrements by, 

162, 165, 181, 

" " Construction of, 166, 

" " Data for 181, 

Equitable Office, origin of 40, 

" Application for charter and re- 
sult 

" Bonuses of 51, 302, 366, 

Early rates of 40, 45, 

" Enrolled under Deed 

" First properly constituted Life 

Office 

" Its Bonus plan 



137 
242 
122 
263 
145 

90 
112 

23 
119 

12S 
124 
160 

182 
181 
182 
214 

42 
373 

46 
44 



INDEX. 



507 



Page 
Equitable Table of Mortality... .177, 341, 242 

Europe, mortality in 82 

Expectation of life at advanced ages 74 

" At all ages....' 108 

" " Short rule for ascer- 
taining 167 

Experience Table 106, 178 

Data for 179 

" Peculiarities of 180, 181 

" Objections to 180,181 

Expenses of Management 232, 307 

" " Examples of. . . 233 

" " What should be 

the limit of, 234. 236 
" " Scheme for lim- 
iting 235 

" " How they should 

be provided.. 237 

FACTS in human lite 531 

Failure of Offices, causes of. 59 

Families, number in 124 

Farmers and Laborers, relative deaths of, 77 

Farr, Dr., his services referred to 181 

Fat, uses of 153 

Female Life as distinguished from male 

life 126,165, 184 

Females, excess of in England 126 

" More always living than of 

males 127 

Finance of Life Assurance considered. . . 345 

Financial progress of Life Office 351, 353 

Fire Companies of Philadelphia 487 

Fire Insurance, dangers and safety of . . . 493 

" Origin of 16 

" Early rates of premium, 17 

" First English Office 17 

" And Life Assurance, com- 
bined evils of 267 

" And Life Assurance, dif- 
ference between 415 

" Offices, cautions to 409 

" Shares as a speculation, 407 

" Statistics of. . . 506, 507, 508 

" Its scientific basis 462 

" Early struggles of 463 

" Companies of New- York, 463 
" National Board of Un- 
derwriters 475 

" Value of 486 

Fires in Paris 487 

Fires, inventions for extinguishing inci- 
pient 491 

Fires, Incendiary, how encouraged 488 

Fire risks, average value of 462 

Fire statistics, recent 494 

Fires, physical and moral causes of 493 

Fire Underwriter, a good 494 

Fitch, Dr., quoted 139 

Flourens, M., quoted 146, 147 

Folkstone Tontine, improvement scheme 

a failure 15 

Food, price of, influence on births 90 

" " On marriages.. 95 
Foreign Residence, extension of limits.. 248 
France, Life Assurance formerly prohibi- 
ted in 25 

" Life Offices in 26 

" Sums assured in 26 

" Mortality observations in 50, 184 

" Annual rate of mortality in 81 

" Proportionate density of popu- 
lation 128 

Frauds on Assurance Offices 48 

Fraudulent insurance 489 

French life 184, 186, 187 

French Tontine Insurance 552 

"■Friends," duration of life amongst the, 145 
Funds, a criterion of value of money, 206, 209 



Page 
GAMBLING Insurances, suppression of 

26, 33 
Gardeners, their average duration of life , 143 

Generations, how prolonged 120 

" Duration of 146, 184 

Genoa, mortality in 82 

German Fire Insurance policy, translation 

of 484 

German Tontine Insurance 552 

German writers on Life Insurance 540 

Germany, Life Assurance in 27 

" density of its population 128 

Glaisher, Mr., on marine losses 458 

Globe Office, capital of 230 

Gold, influence of continued supply 210 

" Golden Ages " of Assurance Companies, 

49,53 

Gouraud, Dr. , his work quoted 22 

Government losses by Annuities 158 

" Attempt on the Funds of the 

early Offices 47 

" Mortality Table 178 

" " Data 178 

Granville, Dr., on deaths, quoted 101 

Graunt, John, first work on Life Assur- 
ance 19 

Gross premiums, remarks on valuation 

of 363, 364 

Guthrie, Dr. (Edinburgh), quoted 129 

HALIFAX, mortality of 128 

Half-credit system, evils of 254, 258 

" " Injurious effects on 

Offices 260 

Haller on longevity 137, 147 

Hallet, Sir John, his Insurance scheme. . 38 

Halley and the Breslau Table 21, 163 

" First Life Table arranged by . .22, 160 

Halliday, Dr. Andrew, quoted 132 

Hamburgh, mortality in 82 

Hand-in- Hand Office, origin of 17 

Hannani, Wm., on Selection of Lives.... 246 
Hanseatic League, its objects and code. . 453 
Hartnoll, J. Hooper, his crusade against 

Bubble Companies 55 

Hayes, Richard, work on Life Assurance, 

34, 35 

Hebrews, their customs in midwifery 90 

Herschell, quoted 157 

High rates of premium discussed, 

283-8, 422, 425 
Holland, observations on the Lives of 

Annuitants in 50, 80, 81 

" Comparative mortality in 81 

" Proportionate density of popu- 
lation 128 

Holy Cross, observations on mortality 

of 50, 173 

Homans, Sheppard, mortality observa- 
tions 187 

ICELAND, productiveness of marriages 

in 96 

" Proportionate density of po- 
pulation in 128 

Idiotcy ..132 

Illegitimate children, statistics concerning, 87 
" " Vary in different dis- 
tricts 87 

Improved mortality, causes of 142 

Improvements in Life Assurance 247, 317 

" Pretended, evils 351 

Income-Tax, first exemption of Life pre- 
miums from 49 

Incomplete observations, results of 160 

Increasing premiums, advantage of 254 

Independent gentlemen, mortality among, 144 
Independent, The, on Fire Insurance. .! . 486 
Indigence, deaths from 107 



568 



INDEX. 



Page 

Indisputability, delusions of 255 

" Its consequences 257 

" Maybe made beneficial. . 265 

Infantine deaths, causes of 88 

Innkeepers, mortality amongst 78 

Institute of Actuaries, establishment and 

objects of 62 

Insanity, statistics concerning 131 

" Causes and increase of 132 

" Its effects in shortening life 246 

Insurance and Assurance, distinction be- 
tween 5 

" Accounts, what they embrace, 438 
' ' Companies, if unsound will fail, 247 

" Dishonest practices in 9 

" First indications of 5 

" Improvements in the practice of, 247 

" Legislation 56, 60, 61, 64 

" Projects of 1845 56 

" Projectors 57 

" Companies, relative standing 

of New- York 460, 461 

" Parliamentary Committee on, 455 

" Official indorsement of 457 

" Commissioners of Massachu- 
setts 473 

" Laws relating to, in Canada, 

etc 492 

" Monitor on New- York Compa- 
nies 474 

Ohio Report 491 

" Operations in Massachusetts . . 471 
" Rapid progress of in San Fran- 
cisco 488 

" Promoters of the Companies 

of 1852 57 

" Schemes of the past century, 

28, 36 

" Shares as an Investment 407 

" Swindles 56 

" Wagers 32, 33, 163 

'• Wisconsin statistics 491 

Interest, early writers upon 34, 35 

" As a source of profit 305 

" Compound and simple 379 

" Early rates of 200, 205 

" First English Act relating to. .. 201 
" First limitation to the rate of, 

203, 206 

" Historically considered 200, 204 

" Formerly prohibited 201 

" Its effect on investments ... 377, 380 
" Its bearings upon Life Assu- 
rance 

194, 198, 200, 270, 281, 388, 389 
" Influence of peace and war on, 

207, 208 
" Probable future rates, 207, 210, 211 

" Rates in Scotland 211 

" Scripture denunciation against, 201 
Investment, importance of good, 199, 211, 375 
" Life Assurance as an, 

368, 372, 375 

" Of small sums 378 

Ireland, First Census of 112 

" In what respects it differs from 

England 130 

Irish famine, statistics of 107 

" Lives, curious results concerning. . .186 

JENKINS, Henry, account of. 145 

Jews and Marine Insurance 8 

" Invented bills of exchange 8 

" And interest 202 

Jewry, statute of 203 

Joiners and carpenters, their duration of 

life 143 

Joint-Stock Company's Act, Table of 

Companies formed under 64 



Page 
KAYSER, Dr., quoted 97 

Kersseboon's Mortality Table 186 

Kidderminster, Mortality of 128 

Kings, the duration of their lives 75 

... 76 



LABORERS and Farmers, relative 

deaths of 77 

Lake insurance, rates of premium 457 

Lakes, loss of life and property on the. . 456 
Lapsed oolicies, not advantageous to Of- 
fices 245 

" " Considered as a source 

of profit 308, 363 

" Effects on funds 363 

Laurie, Sir Peter, and bubble Companies, 55 

Law of Insurance, California 490 

Law Life, an incident connected with the, 319 

Lawyers, duration of their lives 143 

Learned professions, average of life 

amongst 143 

Leeds, duration of life in 84 

" Proportion of deaths in 121 

Legacy duties, data for 174 

Legislation for Assurance Offices, neces- 
sity for 438 

Lessius, art of enjoying perfect health. . . 151 
Life Assurance Companies of the United 

States, list of 509 

*' Their position and busi- 
ness 510 

" Rapid growth of 511 

" Origin of 18 

" Abuses in practice 

255, 264, 361 
" And fire combined, dan- 
gers of 267 

" As an investment 367 

" Certainty of 367 

" First work on (Graunt), 19 

" Hypothesis on which it 

is based 197 

" Investments 210 

" Its Practice in England, 51 

" Security of 371 

" Theory of 156 

Gems 544, 550 

" Its relation to the family, 540 

Who resort to 537 

Life, critical periods of 531 

Life Insurance contrasted with Fire In- 
surance and Savings Banks 539 

Life Insurance, in Russia 540 

'' German writers on.. .. 540 

Life Insurance for the British poor 532 

Life, pecuniary value in early times 6 

" Dangers in the course of 78 

" Divisions 80, 146, 147, 148 

" Hours most fatal to 103 

" Hufeland's do 135 

" Its limits considered 103, 146 

" Lord Bacon's definition of. 135 

" Love of 134 

" Offices, shares in, as a speculation, 407 

" Prolongation of 150, 179 

" Table, first formed by Halley .... 22, 161 

" Tables, data for 170 

" The chances of 377 

" The friends and enemies of 134 

Limited Liability, how it may be secured, 

230, 410 

" Act 64 

Limits of life 146 

Little Goes, the 29 

Liverpool, duration of life in 81, 84 

'• And Surrey contrasted 84 

" Mortality of 128 

" Proportion of deaths in 120 



INDEX. 



569 



Page 
Lives and money, basis of Life Assurance 

194, 197 

" Lloyds's," objects of 455 

Loading Life Premiums.... 273, 277, 279, 355 

As a source of profit 307, 356 

" No rule for 278 

" Percentage of. 282 

" Seclusion from valuation consi- 
dered 359 

Loans with Life Assurance, dangers of, 

254, 262 

Locality, influence of on life 80 

" " On births and deaths, 85 

Lock-jaw, deaths from. 150 

Lombards in London 202 

Lombards, the, the first European under- 
writers 449, 450 

London Fire Records, Mr. J. H. James on, 462 

Longevity, its advantages 133 

" Amongst philosophers, poets, 

and painters 141 

" Amongst Kings, Princes, 

Popes, and Apostles. . .139, 140 

41 Britain long famed for 136 

" Essentials to 145 

" Follows the line of the East- 
ern coast 138 

" In America 139 

" Men only attain the extreme 

ages 138 

" Of women 137 

" Of " Friends " 137, 145 

" Physiological view of 146, 147 

" Portrait of a man destined to, 154 

" Eules for attaining 152 

London Assurance Corporation, origin of, 

11, 32 
" ' " Its first Life policy... 37 

London Marine Brokers' 1 swindle 60 

London overgrown 20 

" Birth-places of the people 89 

" Chronicle on Insurance wagers . . 33 

" Density of population in 83 

" Mortality 85 

" New buildings forbidden in 1581, 20 
Longevity, influence of occupation on. . . 533 

Longevity, transmitted 531 

Losses, American, at sea 456 

Losses by fire, increase of 487 

Losses by fires in the United States 487 

Losses, by fire, percentage of to pre- 
miums paid 477 

Losses, percentage of New- York Joint- 
Stock Fire Companies 501 

" Of New- York Mutual Fire Com- 
panies 502 

" Of other States and foreign coun- 
tries 502 

Lotteries 15 

Lunatics, statistics of 131, 132 

Luxury of living restricted 119 

Lyons, Mortality in 82 



MALE and Female Life, difference in 165 

Mackenzie, Peter, and Bubble Companies, 55 

Madeira, Mortality in 83 

Madrid, density of population in 83 

Magistrates, duration of their lives 143 

Males, excess of, in the United States. . . . 537 

Malthus quoted 116 

Malta, proportionate density of popula- 
tion 128 

Management, importance of sound. . .198, 409 

" Expenses of 232 

Managers, importance of good ones. .416, 420 

Manchester, duration of life in 84, 121 

Manchester, mortality in 128 

Marine and Inland Insurance, statistics of, 505 



Marine Insurance, origin of 6 

First corporations for, 12 
First English statute 

relating to 7 

" Number of failures in, 11 

" Supposed to have ori- 

ginated with the Jews, 8 
" States General, scheme 

of 8 

Pocock on 449 

" Rise and progress of, 

450, 455 
" Early premiums on . . . 454 

" Percentage of losses . 461 

" On California coast ... 456 

Marriage, and its influences 92, 96 

" And suicide 95 

" Average age of persons marry- 
ing 92 

" Influence on the duration of 

life 96 

" Productiveness of 97 

" favorable to long life 542 

Maritime Code of Rhodes 451 

Maritime law, origin of 452 

Codes of 452,453 

Massachusetts, history of insurance in . . 471 
" Number of fire companies 

in 472 

" Statistics of Joint-Stock 

Fire Companies 472 

Massachusetts, Insurance Commissioners 

of 473 

Masons, duration of their lives 143 

"Mean duration 1 ' of Life, how ascer- 
tained 193 

Medical men, duration of Life amongst . . 143 
Medical examination, importance of, 238, 423 
Men, why they die sooner than women. . 95 
Mercantile and Assurance balance-sheets 

contrasted 313 

Mercers' Company Insurance scheme 28 

Mere, Chevalier de, and the laws of 

chance 22 

Merchants, duration of their lives 84, 143 

Metropolis of England, mortality of 81 

Millers and Bakers, duration of their lives, 143 

Miners, mortality amongst 78, 79 

Minimum Mortality,age at which it occurs, 163 

Misfortune funds, remarks upon 263 

Mixed Offices, origin of 213 

" Effects of 52 

" Liabilities in 229 

" Premiums of all the 295 

" Relative advantage of, 215, 229 

Moderation, its advantages 139, 151, 154 

Modern Assurances, the appliances of . . . 5 

Moral hazard of Fire Insurance 490 

Mortality, certainty of the law of 74, 163 

" In young Offices 348 

" Improvement in the rate of, 

50, 150, 191 

" List of observers upon 170 

" Male and Female during in- 
fancy 87 

" Progress of observations on.. 50 

" Tables, construction of 156 

" Variations in 151 

Mortality, greatest in cities 518 

Mortality, statistics of 512, 514, 516 

Mortality Tables, construction of, 156, 158, 165 
Data on which they are 

based 170 

" First idea of 159 

" Peculiarities of 156 

Comparison of results, 172 
" Importance of valua- 
tions 315 

Moscow, mortality in 82 



510 



INDEX. 



Page 

Murders, statistics concerning 106 

Mutual Fire Companies, early operations 

of 473 

Mutual Offices, origin of 213 

'' Relative advantages of, 

215, 229 

'.' Liabilities in 218, 228 

" Dangers to young ones.. 228 

" Rates of all the 294 

Mutual Life office of New- York, expe- 
rience of 187 



NAME, changed, list of offices which have, 
Naples, proportionate density of popula- 
tion 

National Board of Underwriters, form of 

fire policy recommended by 

National progress, cause of 

National Provident experience 

National Life Tables, advantages of. 

Naval supremacy 451, 

New Assurances, effects of on doubtful 

Companies 357 

New Companies, not all bad 59 

" Creation of 225 

" Room for 409 

Newspapers and the early Assurance 

Offices 30 

New-York Chamber of Life Insurance. . 528 

New-York, density of population in 83 

New-York Fire Insurance Companies, 

list of 463, 471 

New-York, fires in 487 

New-York Insurance Companies, increase 

of 475 

New- York Insurance Department 473 

New-York Mutual Fire Companies 473 

New-York, standard mortality table of. . 538 

New-York statistics of insurance i 459 

" Underwriters 456 

Net, or "pure " premiums. .273, 279, 281, 282 

Non-participating rates of premium 299 

" Policies, profits from .. 308 

Norwich, observations on the mortality of, 50 

Norton, Richard, on decimal notation 35 

Northampton Table of Mortality .. 45, 50, 172 
Northampton Table of Mortality, errors 

of 157, 174 

" Table, Peculiarities of . . . . 172 

" Mortality in the town of. . 83 

OCCUPATION of the people 124 

" Effect of on duration on 

life 77 

Occupation, influence of on longevity 533 

Odier, M., quoted 96 

Ohio Insurance Report 491 

Old age, " the sweet praises" of 133 

" Proportions who attain it in va- 
rious Countries . 136 

" Few persons who die of . . . 149, 150 

PAINTERS, duration of life amongst,141, 143 

Pandrii 7 ' mologia, quoted 9, 13, 34, 205 

Participation in Profits, right of 307 

Parish Registers first kept 18 

Paris Fire Insurance policy, translation of, 481 

Paris, fires in 487 

Parliamentary Committee on Insurance . 455 

Parr, Thomas, account of 145 

Parliamentary Committee, first, on Insur- 
ance Associations... 10 
" " (1853) report quoted, 223 

Pascal's Provincial Letters referred to. . . 15 

Paupers, statistics concerning 131 

Peace and War, influence on population, 

116, 117 
" Influence on rate of in- 
terest. . . ; 206 



149 
141 
105 

128 



Page 

Pekin, density of population in 83 

Petty, Sir Wm., speculations on London, 20 

Philadelphia Fire operations 487 

Philosophers, duration of life of. 141 

Physicians, duration of life amongst 142 

Pilgrims to the Holy Land Insured 13 

Piracy, losses by 458 

Pneumonia, deaths from 

Poets, duration of life amongst the 

Poison, deaths by, annually 

Poland, proportionate density of popula- 
tion 

Policies, fire, Connecticut 492 

Policies, life, yearly issue of 511 

Policies, proportions that become claims, 350 
" Mode of ascertaining value of . . 385 

" Purchase of. 382, 384 

Policies, valuation of 542 

Policy of Fire Insurance, National form of, 478 

Policy of Fire Insurance of France 481 

" Germany 481 

Political excitements, effect on population, 118 

Popes, duration of life amongst the 140 

Population, first general enumeration of, 111 

" Causes of increase 116 

" Early estimate of Ill 

" Effects of commercial panics, 116 

" Of Ireland, peculiarities of.. . 130 

" Of Scotland, " ". . 129 

" Progress of 112, 113, 114 

" Speculations as to that of 

London 20 

" To the square mile in town 

and country 84 

Post Magazine, origin and uses of.... 55, 56, 57 
Povey, Charles, and the Sun Fire Office. . 29 

" Fire Annihilator 29 

Premiums charged by the Offices 36 

" Advantages of moderate 248 

Charged for expenses, 273, 277, 279 

" Chapter on 269, 291 

" Early rates of, on Marine In- 
surance 

" Gross valuation of 364, 

" High and low discussed, 

283, 291, 424, 

" How constructed 270, 

" "Natural" and "equalized," 

270, 349 

" Of all the existing Offices 293 

" Of New -York Joint-Stock Fire 

Companies 499 

" Of New -York Mutual Fire 

Companies 500 

" Of companies of other States 

and foreign countries 500 

" Received by Philadelphia Fire 

Companies 487 

" Signification of the term 269 

Single 271 

" Present Values " explained 315 

Price, Dr., and the Northampton Table.. 45 
Prisons, mortality from confinement in.. 107 

Probable duration of life 163 

Probabilities, theory of 462 

Probabilities, theory of 556 

Probabilities, origin of the theory of — 15 

Writers on 25, 52 

Profits of Fire Insurance 476 

Prospective Bonus plan 322 

Promoters of Insurance Companies 56, 57 

Proprietary Offices, origin of 214 

" Premiums of the. ... 299 

" Relative advantages 

of 2^7 

Profits, sources of. 236, 304, 311 

" Early divisions of. 304 

" Erroneous notions concerning. . • 309 
Distribution of, 311, 312, 328, 235, S88 



454 



425 
274 



INDEX. 



571 



Page 

Profits, Periods for dividing 320, 416 

" Proportions divided 323 

Prussia, annual rate of mortality in 81 

Public Advertiser, the, on Assurance wa- 
gers 33 

Publication of accounts 425, 432 

Purchasing policies, rules for 273 

Pythagoras, his divisions of life 148 

QUAKERS, longevity amongst the 144 

RAISING- sunken vessels 458 

Rates of premium for Life Assurance.. . . 37 

" Chapter on 269, 291 

" Of the Mutual Of- 
fices 228 

Redding, Cyrus, History of Cornwall, 

quoted 85 

Reduction of premiums by bonuses. .332, 334 
Reform Bill excitement, effects on popu- 
lation 118 

Registration Records, importance of 537 

Reid, John, Philosophy of Death, quoted, 102 
Residence, foreign, extension of limits. . . 248 
Resurrection, calculations of numbers to 

be at 20 

Retrospective legislation, instance of 202 

Reversionary bonuses discussed 328, 334 

Rome, mortality in 83 

Roman Life, observations on 18, 74, 159 

" Enumerations made every fifth 

year 18 

Royal, experiences of mortality 189 

Royal Exchange Office, origin of." 12, 32 

" " Early business of the 43 

" " Its first Life policy... 38 

Royalty, expectation of life amongst . . 75, 140 

Russia, annual rate of mortality in 81 

Russia, Life Insurance business in 540 

Russian longevity, instances of , 139 

Rutlandshire, duration of life in 84 

SAGES-FEMMES of France 90 

Sanford, John E. , on fraudulent insurance, 489 
San Francisco, insurance companies of. . 4S9 

Sardinia, annual rate of mortality in 81 

Savings Banks and Life Insurance 539 

Sawyers, average duration of the lives of 143 
Saxon Guilds, their bearing upon the pro- 
gress of Insurance 5, 16 

Schleisner, Dr., quoted 96 

Scotland, in what respect it differs from 

England 129, 130 

Sea, Fire, Life, swindle 56 

Seasons, their influence on births 87 

Security of Life Assurance 371 

Selection of an Oflice. . .198, 320, 323, 414, 419 

" " Guide to 414, 431 

Selection of lives 238 

" As exercised against the 

Offices 243 

" Necessity for. . . 238, 239, 240 
" The advantages of, 309, 346 
Select Committee on Assurance Associa- 
tions 223 

Shareholders, a sample of 60 

Shrewsbury, mortality in 128 

Simpson,Thomas,his writings and career, 

22, 161 

Sleep, necessity for 152 

Solicitors 532 

Small-pox, statistics concerning 115 

Smith, Adam, quoted 119 

Sovereigns, Table of the causes of death 

of. 75 

" Average life of 76 

" Expectation of life of 75 

Spain, proportionate density of popula- 
tion. 128 



Page 

Speculative Insurances, period of. 28, 34 

Stability, increased, of insurance compa- 
nies 488 

Stability, the true test of 426 

State action and its benefits 473 

Statesmen, strange fatality amongst 77 

Stature, observations on 154, 246 

State reasons against Life Assurance Cor- 
porations 42 

Stockholm Table of mortality 160 

" Mortality in 82 

Stonemasons, average duration of the 

lives of 143 

Strength of the Nation . . 123 

St. George's, Hanover-square, and White- 

chapef contrasted 85 

St. Petersburgh, mortality in 82 

Stranding, causes of 457 

Substitution of lives, advantages of 267 

Success, conditions of 227 

" Elements of 60 

Suicide, fewer married than unmarried 

commit it 95 

Causes of 110 

" Conditions of Assurance as to. . 250 
" Fewer in Roman Catholic coun- 
tries 108 

" Modes of accomplishing 110 

" Statistics of 109 

" In various countries, 109 

Sun Fire Office, origin of 29 

Sunderland, mortality in 128 

Surgeons, average duration of life of 143 
Surplus and profits, distinction between, 310 

" " Definition of 313 

Surplus fund, its meaning 157 

" How appropriated . 310,326 
" "Whole should not be di- 
vided 324, 327 

Surplus, what may be considered as 345 

Surrender of policies 244, 250 

" As a source of profit, 308 

" Effects on the funds, 363 

" Improved regulations 

as to 251 

" Influence on the funds 

of the Office 245 

Surrey, expectation of life in 74, 84 

" and Liverpool contrasted 84 

Sweden, observations on the mortality 

of 50, 173 

" Annual rate of mortality in 81 

" Proportionate density of popula- 
tion 128 

Switzerland, proportionate density of 
population 128 

THEORY of Life Assurance 156, 193 

Tontine, Annuities, origin of 14 

" " Why they did not suc- 
ceed 14 

" Bonuses explained 331, 339 

" " Objections to 335, 339 

Tontine Insurance, origin of 551 

" Different systems of, 551 

" Statistics of 552 

Tontine Insurance, advantages of 554 

Towns, causes which increase the mor- 
tality in 83 

Town and Country districts, mortality 

of ....84, 120 

" " Life, relative effects 

of 129 

" " Life Contrasted 180 

Transition period in Insurance history, 36, 48 

Travelling, statistics of 124 

" Extension of limits allowed.. fti8 
Tribune, The Neiv-Yorlc, on Lite Insur- 
ance 541 



572 



INDEX. 



Page 

Truro, duration of life in 84 

Tuckett's (American) Insurance Journal, 302 
Turkey has no periodic enumeration of 

its people . ." 123 

' ' Proportionate density of its popu- 
lation 128 

Tynemouth, mortality of 128 



ULPIAN'S Table of Koman life 159 

Underwriters, Fire, National Board of . . 475 
Uniform or invariable premiums, how 

constructed 272 

United States of America, Assurance in, 27 
" Assurance Companies in. .. 177 

" Longevity in 139 

" Pate of mortality 81 

" Variety of Climate in 188 

Upper Italy, density of population 128 

Usury, laws against n 



204 



VALUE of policies explained 386 

Valuations, objects of 313 

" Effect of errors in 317 

" How false ones are conducted 

358, 382 

" Process of constructing 

316, 317, 358, 361, 382 

Valuation of policies 542 

Vegetable diet, effects of 152 

Venice, proportionate density of popula- 
tion.. ... 128 

Vienna, observations on mortality of, 

50,80, 82 

Violent deaths, increase of 104 

" Statistics concerning.... 105 



Page 

Vital statistics of the New- York Mutual 

Company 522, 524 

Vital tenure, conditions of its existence, 79 

WAGEKINC Insurances 163 

Wager Policies prohibited 455 

Wainwright, T. G., frauds on Insurance 

Offices 48 

Wales famous for its cases of longevity. . 136 

War, influence on population 117 

Ward, John, Claris Usuras, or Key to In- 
terest 35 

Warrington, observations on mortality of, 50 

Weather, its influence on deaths 101 

Weight, the average of a healthy life 246 

West Middlesex swindle, the 54 

Wheat per quarter during peace and war, 117 
Whitechapel and St. George's, Hanover- 
square, contrasted 85 

Widowers and Widows 93 

" " Per centage of in 

London, 94 
« " " In Scotland, 94 

Winding-up a Company, time for 235 

Winding-up, schemes now under that pro- 

CGSS • •*-• ••-••••■■■ *^C7 

Wisconsin insurance statistics 491 

Wit, John de, his report and its discovery, 16 

Wrecks and casualties at sea 458 

" Causes of 457, 458 

Wright, Hon. Elizur, of Boston 189 

Wright, Hon. Elizur, on Insurance 462 

YOUNG LIVES, effect of the admission 
of.. . 357 

ZYMOTIC DISEASES, deaths from ... 520 



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